Hold TCS, target of Rs 700: Reliance Money

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Reliance Money has maintained its hold rating on Tata Consultancy Services (TCS) with a target price of Rs 700 in its October 21, 2009 research report.

"In the last six months most of the IT stocks has outperformed the major market indices with huge margins, reflecting the renewed investors focus the sectors. TCS being the mammoth Indian IT sector, sharply run up by 121% in the last six months. Going forward, we expect quarterly upgrade cycle to continue in FY11, however strengthening rupee likely to play spoilsport. Nevertheless, as industry environment is on an uptrend coupled with company's core business operation likely to remain strong with strong volume growth and pricing improvement, we expect TCS to remain a market performer in the next 12-months, however in the near term we expect some sideways movement with negative bias. We maintain 'HOLD' on TCS with upward revised target price of Rs 700, at our target price stock will be valued at 22X FY10E and 19x FY11E," says Reliance Money's research report.

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