Sep 10, 2013 12:14 PM IST | Source: Moneycontrol.com

Brokerages bullish on TCS post Rs 200cr deal, stock up 1.5%

The largest software service provider will upgrade tax department's nation-wide IT infrastructure. At present, TCS is the only company with a market value of over Rs 4 lakh crore as Reliance Industries had slipped below this below level.

Brokerages bullish on TCS post Rs 200cr deal, stock up 1.5%

Moneycontrol Bureau

Shares of Tata Consultancy Services (TCS) rallied 1.5 percent in early morning trade on Tuesday as it signed a 5-year contract worth about Rs 200 crore with the Income Tax Department to upgrade its IT infrastructure.

The largest software service provider will upgrade tax department's nation-wide IT infrastructure. At present, TCS is the only company with a market value of over Rs 4 lakh crore as Reliance Industries had slipped below this below level.

Most brokerages are bullish on the stock and have revised target price. Here is what they say:

Morgan Stanley
Rating: Overweight
Target: Raised to Rs 2,285 from Rs 1,670
Rationale: EPS up 13.2 percent to Rs 89.53 while FY15 EPS raised 26.1 percent to Rs113.63. The firm expects TCS to deliver strong revenue growth. However, the stock may correct 5-6 percent in near-term on forex losses. 

Jefferies
Rating: Buy
Target: Rs 2,215
Rationale: Consensus seems to be lagging, especially on FY15. Likely to see significant upgrades going forward.

Deutche Bank
Rating: BUY
Target: Rs 2,150
Rationale: Expect dollar revenue growth of 4.8 percent QoQ.

Nomura
Rating: Neutral
Rationale: FY13-15 dollar revenue CAGR seen at 15 percent.

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