Oct 16, 2017 04:25 PM IST | Source: Moneycontrol.com

Hold TCS; target of Rs 2700: Sharekhan

Sharekhan recommended hold rating on TCS with a target price of Rs 2700 in its research report dated October 12, 2017.

Sharekhan's research report on TCS

Tata Consultancy Services (TCS) delivered better-than-expected margin performance for Q2FY2018, with EBIT margin improving by 170BPS QoQ to 25.1%, led by currency benefits (50BPS) and operational efficiencies (120BPS), partially offset by variable pay during the quarter. Revenue for the quarter increased by 3.2% on reported basis to $4,739 million, led by 3.2% volume growth, 1.1% tailwinds in cross currency and robust performance in digital services. However, on a constant currency (CC) basis, growth was at 1.7% QoQ, tad below our estimates. Other income declined by 13% QoQ due to lower treasury gains, which were down 20% QoQ owing to completion of buyback programme (Rs.16,000 crore) in the last quarter. Net income for the quarter increased by 8.4% QoQ to Rs.6,446 crore.

Outlook

we maintain our Hold rating on the stock with a revised price target of Rs.2,700.

For all recommendations report, click here

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