IT stocks such as TCS, Infosys, HCL Technologies and Tech Mahindra had been trading up to 3.5 per cent down on BSE on Tuesday. Tata Consultancy Services share value fell as a great deal as 4.36 per cent to Rs 3,one hundred.05 apiece and was the prime BSE Sensex dragger on the back of profit-booking a day just after it posted a 15 per cent on-year rise in net profit to Rs 9,246 crore in the January-March quarter. Research brokerage firms and analysts have mixed response to TCS Q4 benefits. Analysts at ICICI Securities have downgraded TCS stock to ‘hold’ from ‘add’ as they think that market development is unlikely to witness a meaningful acceleration (vs pre-Covid) more than the medium term as is anticipated by the street.
Nifty IT index was the prime sectoral loser, down 3.34 per cent weighed down by losses in Coforge, which was down 7 per cent. Other IT stocks such as Mindtree, TCS, Tech Mahindra, Infosys, Wipro had been down in the variety of 1.5-4.4 per cent. Technology stocks had run up sharply in anticipation of powerful benefits. “However, further performance required a strong earning beat combined with above expectation growth outlook,” Investment advisor Sandip Sabharwal told TheSpuzz Online. Sabharwal added that the outlook appears decent but valuations are stretched. “At such a price, timewise correction is imminent,” he added.
Related News
-
TCS, Yes Bank, BPCL, Coforge, Prabhat Dairy, Bandhan Bank, Adani Ports stocks in focus today
-
Sensex, Nifty might open flat 5 issues to know ahead of today’s opening bell
-
Market LIVE: Nifty off day’s higher, nonetheless in green, Sensex above 48,000 RIL, ICICI Bank top contributors
TCS’ board of directors have also advisable a final dividend of Rs 15 per share. In the earlier 3 quarters, the firm has offered interim dividends of Rs 5 per share, Rs 12 per share, and Rs 6 per share. The total dividend offered by TCS in FY21 now stands at Rs 38 per share. “The main reason which seems to be ailing the IT sector as of now is the weak USDINR pair as it settled 32 paise lower on Monday, which has a potential risk of wiping out the earnings of from foreign revenues of such IT firms,” Vishal Balabhadruni, Senior Research Analyst at CapitalVia Global Research, told TheSpuzz.
What must you do with TCS stock now?
Analysts think that today’s fall in IT shares delivers a excellent chance for the investors to make a re-entry. IT stocks are witnessing profit booking post-TCS benefits, with earnings marginally beneath analysts expectations. “Overall, with IT stocks till recently, hitting record highs, a healthy correction is always welcome, as it at the same time, offers opportunities for re-entry,” Aamar Deo Singh, Head Advisory at Angel Broking, told TheSpuzz Online. So far in the trade, a total of 1.09 lakh shares have traded on BSE, although 38.56 lakh shares have exchanged hands on NSE, so far.
Those at Kotak Institutional Equities have maintained a ‘reduce’ rating to the TCS stock due to its high-priced valuations. ” At 27.4X FY2023E, the upside is restricted,” it added. While Macquarie has an ‘outperform’ rating to TCS stock, with a target value of Rs 3,640, a 17.4 per cent rally from today’s low.
(The stock suggestions in this story are by the respective study and brokerage firm. TheSpuzz Online does not bear any duty for their investment guidance. Please seek the advice of your investment advisor ahead of investing.)