Hitesh Shah, IT analyst at IDFC Securities told CNBC-TV18, "We have an outperform on Tata Consultancy Services (TCS) at this point of time with a 12-months price target of Rs 3,000."
"In the previous two quarters they had missed earnings expectations. If they do what is the current street expectation, it would be still in line with our expectation rather than missing. We would have to wait and see what do they finally report. Having said that, the stock is at much reasonable valuation than what it used to trade about a year to a year and a half back. There is clearly some slowdown in overall global IT spending and that is what some of the midcap companies have warned for this quarter," he said.
"We believe that the largest players like TCS are relatively better placed in this volatile macro environment. We also saw TCS getting impacted by the BFSI revenue in the previous two quarters where they had some pressure on their policy administration business in UK, which is likely to recede in the next quarter or two."
"So I do not expect TCS to significantly underperform overall sector or the broader markets. The broader market would be more based on how domestic economy does and most of the IT services stocks are more levered to the global economy than to the domestic economy. We believe that it would be low beta but the reasonably high alpha name in the sector," he added.
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