Buy TCS; target of Rs 1426: Dolat Capital

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Buy TCS; target of Rs 1426: Dolat Capital

Dolat Capital is bullish on Tata Consultancy Services (TCS) and has recommended buy rating on the stock with a target of Rs 1426 in its January 17, 2012 research report.

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Dolat Capital is bullish on Tata Consultancy Services (TCS) and has recommended buy rating on the stock with a target of Rs 1426 in its January 17, 2012 research report.

"TCS's Q3 FY12 results were at ` 132 bn inline with our estimates of Rs 131 bn with a sequential growth of 13.5%. In constant currency terms, company has grown by 4.5% which was impacted negatively by 2.1% from cross currency and shown 2.4% sequential growth at USD 2586 mn in reported terms. The company maintained its positive stance on IT spends with zero cancellations in the projects and major finalizations of the budgets with a positive tone."

"We remain positive on TCS in view of its sustained revenue growth and potential to deliver mid teens earnings for FY13. There were concerns raised on sector post Infosys earnings. TCS commentary, while cautious near term, remains positive on structural demand. In near term, we also believe IT stocks to move in narrow range in run up to April earnings guidance and stay muted in INR appreciation. We maintain our Buy rating on TCS with a target price of ` 1426 valued at 22x of its FY13E EPS of ` 64.8."

"TCS managed broad-based growth across geographies, except for the MEA, Asia pacific and continental Europe which shown a de growth of 5.9%, 6.9% and 5.7% respectively. Vertical wise, company has a mixed performance with a significant growth from the telecom, and Media whereas Hi tech, retail and travel have shown negative growths," says Dolat Capital research report. 

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