TCS Surpasses Market Expectations with Strong Q4 Results, Stock Expected to Rise

Indian IT giant Tata Consultancy Services Ltd (TCS) has reported impressive fourth-quarter results for the fiscal ending on March 31, 2024, outperforming market estimates. The company’s consolidated net profit surged by 9% to ₹12,434 crore, while revenue from operations grew by 3.5% year-on-year to ₹61,237 crore.

Key financial analysts from various firms have revised their price targets for TCS stock post the strong Q4 results. Nuvama has upgraded its earnings estimates slightly for FY25, with a new target price of Rs 4,560. JPMorgan now rates the stock as overweight with a target of Rs 4,500, while Goldman Sachs values it at Rs 4,350.

Nirmal Bang, on the other hand, maintains a ‘SELL’ rating on TCS due to its rich valuation despite tweaking revenue and EPS estimates upwards for FY25-FY27. The brokerage highlights the IT sector’s ‘slower for longer’ scenario as a concern.

Arihant Capital Markets predicts a 6% dollar term growth for TCS from FY24 to FY27 and maintains a Hold rating with a target price of Rs 4,318 per share. Analysts are now eyeing Infosys‘ Q4 results, scheduled for April 18, to gauge the overall recovery status of the IT sector.

Market experts foresee a positive momentum for TCS stock, expecting a potential rise post-Q4 performance. Prashanth Tapse, Senior VP (Research) at Mehta Equities Ltd., mentioned a technical breakout level at ₹4,025, which could propel the stock to ₹4,200 and ₹4,250. The stock closed at ₹4,000.30 on Friday.

Dhruv Mudaraddi, Research Analyst at StoxBox, emphasizes TCS’s optimistic outlook for the upcoming quarters post a year under new management. Despite concerns around IT spending budgets, TCS’s strong order inflow and operational improvements are expected to drive growth in the months ahead.