SENSEX NIFTY
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.

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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