TCS shares surge 4.5%; Goldman Sachs upgrades to buy - Moneycontrol.com

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Oct 03, 2013, 01.14 PM IST

Goldman Sachs upgraded the stock to buy from neutral and raised the target price to Rs 2300 from Rs 1700 earlier.

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TCS shares surge 4.5%; Goldman Sachs upgrades to buy

Goldman Sachs upgraded the stock to buy from neutral and raised the target price to Rs 2300 from Rs 1700 earlier.

Like this story, share it with millions of investors on M3

TCS shares surge 4.5%; Goldman Sachs upgrades to buy

Goldman Sachs upgraded the stock to buy from neutral and raised the target price to Rs 2300 from Rs 1700 earlier.

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Shares of Tata Consultancy Services (TCS) gained more than 4.5 percent in afternoon trade Thursday, continuing its upmove for the second consecutive session.

Goldman Sachs upgraded the stock to buy from neutral and raised the target price to Rs 2300 from Rs 1700 earlier.

The brokerage house forecasts sector leading USD revenue CAGR of 18 percent for TCS over FY13-FY15E (estimates), on the back of its strong positioning in a rising demand backdrop, driven by: (1) dominant positioning in financial services (BFSI), which is witnessing a pick up in IT spending partly due to increase in regulatory compliance related spends in US/EU; and (2) diversification and scale across verticals and service lines, which are key competitive advantages for TCS.

Consequently, Goldman Sachs expects TCS will maintain industry-leading returns. TCS is also on the Goldman Sachs Sustain Asia ex-Japan List, the report said.

Meanwhile, the country's largest software services exporter will announce its July-September quarter earnings in October. It has been the consistent performer, reporting better numbers than its peers.

In previous quarter (April-June - first quarter of FY14), Tata Consultancy Services' consolidated net profit grew 16 percent year-on-year (6 percent quarter-on-quarter) to Rs 3,831 crore, helped by new deal wins and a foreign exchange gain while revenues rose 21 percent Y-o-Y (10 percent sequentially) to 17,987 crore.

At 12:49 hours IST, the stock gained 4.08 percent to Rs 2,025 amid high volumes on the Bombay Stock Exchange. In last three months, it rallied 36 percent, largely driven by rupee depreciation.

(Posted by Sunil Shankar Matkar)