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Apr 10, 2013, 06.08 PM IST | Source: Moneycontrol.com

How to trade TCS post Alti acquisition

Brokerages are bullish on Tata Consultancy Services after it announced to foray into France on Tuesday. The software services exporter has signed definitive agreements to buy 100 percent of Alti SA, an IT services company in France for Euro 75 million in an all-cash deal.

Moneycontrol Bureau 

Brokerages are bullish on Tata Consultancy Services  after it announced to foray into France on Tuesday. The software services exporter has signed definitive agreements to buy 100 percent of Alti SA, an IT services company in France for Euro 75 million in an all-cash deal.

The acquisition will strengthen TCS' ability and footprint to service its customers in France and other regions in Europe. The stock rallied 2.19 percent to close at Rs 1,530.05 on the BSE.

Morgan Stanley has an overweight rating on the stock with a target of Rs 1670. It says the acquisition will contribute 1 percent of rev and 0.5 percent in FY14.

Agreeing that the buy will have negligible earnings impact, UBS, too, advises to buy the stock for a target price of Rs 1850. According to UBS, the acquisition will boost TCS’ presence in EU.

Religare also has a buy rating on the stock. "We expect limited financial impact for TCS despite lower margins, as it will add 1 percent to revenues on a run-rate basis," it said.

TCS stock price

On July 28, 2014, Tata Consultancy Services closed at Rs 2588.70, down Rs 16.25, or 0.62 percent. The 52-week high of the share was Rs 2613.35 and the 52-week low was Rs 1691.00.


The company's trailing 12-month (TTM) EPS was at Rs 102.67 per share as per the quarter ended June 2014. The stock's price-to-earnings (P/E) ratio was 25.21. The latest book value of the company is Rs 224.90 per share. At current value, the price-to-book value of the company is 11.51.

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