Geojit Gives Buy Call To Tata Group Stock For Attractive Return, Rs 8 Dividend

Leading brokerage firm Geojit has recommended investors to buy the Tata Group Stock, Tata Consultancy Services Ltd with a target price of Rs 3635 apiece. The analyst has given a time- period of 1 year when the stock will potentially reach this target price. If investors buy the stock now, they can receive potential return of 17%.

According to Geojit, "Despite the economic headwinds in the quarter, TCS rebounded on strong demand for its services. The growth was primarily driven by higher demand for cloud platforms and continued customer interest in technology services as reflected in deal wins."

Check key takeaways below:

1. TCS Stock Outlook

The current market price of TCS is Rs 3124 apiece with an intraday gain of 0.77%. The stock's 52-week high is Rs 4045 apiece and 52-week low is Rs 2926 apiece. The stock is currently trading at a discount of 23% from its 52-week high level.

2. TCS Market Capitalisation And 5-Years Return

The current market capitalisation of TCS is Rs 11,42,044.82 crore as of writing the report. TCS has given multibagger returns to investors in the last 5 years. The stock's 5-years return is 144%, 3 years return is 54%, and 1 year return in negative at 13%.

3. TCS Declares Interim Dividend, Record Date, And Payout Date

The board of directors said in the exchange filing, "We would like to inform you that at the Board Meeting held today, the Directors have declared a second interim dividend of ₹8 per Equity Share of ₹1 each of the Company. The second interim dividend shall be paid on Monday, November 7, 2022, to the equity shareholders of the Company, whose names appear on the Register of Members of the Company or in the records of the Depositories as beneficial owners of the shares as on Tuesday, October 18, 2022, which is the Record Date fixed for the purpose."

Therefore, TCS record date is October 18, 2022 and dividend shall be paid on November 7, 2022.

4. TCS Key Highlights

In Q2FY23, the company added five more new clients in the USD100 million(mn) band, ten clients in the USD50mn plus band, and 36 more clients in the USD20mn band, bringing the total clients to 2781. The company added 9,840 employees in the quarter, taking its total headcount to 616,171. In the last twelve months (LTM), the IT services attrition rate increased to 21.5% (19.7% in 1QFY23).

5. TCS Revenue Growth

TCS posted a revenue of Rs 55,309cr (+18.0% YoY) in 2QFY23, broadly based across verticals led by retail and consumer business (+23.5% YoY) and communication (+21.0% YoY). In retail, TCS witnessed an uptick in demand in travel and hospitality sub-segments, while order book stood at USD 1.6billion. In the communication segment, growth was on the back of investments in 5G and personalised offerings to end customers.

6. TCS Valuation

According to Geojit, "The stock has corrected 15.3% in the past six months, suggesting a buying opportunity. Hence, we upgrade our rating on the stock to BUY with a revised target price of Rs 3,635 based on 28x FY24E adjusted EPS."

7. About TCS

Tata Consultancy Services (TCS), a subsidiary of Tata Sons Ltd, is a global IT services organisation. It provides a comprehensive range of services to its clients in diverse industries. The company caters to finance and banking, insurance, telecommunication, transportation, retail, manufacturing, pharmaceutical and utility industries.

Disclaimer

The stock has been picked from the brokerage report of Geojit. Greynium Information Technologies, the Author, and the respective Brokerage House are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to check with certified experts before taking any investment decision.