Sharmila Joshi of Prabhudas Lilladher is of the view that valuations at this stage would make TCS a good investment proposition. What stands for Infosys will probably hold true for TCS as well and broadly the expectation of the market even in terms of growth whether it is revenue or PAT is more or less similar for both the companies, she added.
Joshi told CNBC-TV18, "The concern on the IT companies is really being with the kind of spend that you are going to see the IT budgets that you are going to see going ahead for 2008. If what we heard from Infosys is anything to go by then there seem to be quite unworried and they do see a good ramp up as far as business is concerned they have closed big deals, they have seen a margin expansion on some of their newer clients that they have bought in. What stands for Infosys will probably hold true for TCS as well and broadly the expectation of the market even in terms of growth whether it is revenue or PAT is more or less similar for both the companies you would expect about a 5-5.5% kind of quarter-on-quarter increase in revenue. So that’s what broadly the market expectation is."
She further added, "But in terms of share price possibly what it does mean is, if the numbers there are no positive surprises in TCS numbers and they are pretty much more or less what we have seen really so far coming from Infosys or what the market is expecting then possibly you won’t see any sharp rally in the price. But the valuations at this stage would make TCS also a good investment proposition. So not a sector that could outperform the market in the near-term but overall looking at valuations they do look like a good investment opportunity whether it’s an Infosys or whether it’s a TCS."
Disclosure: I have personal holdings in Infosys, TCS and ICICI Bank.
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