IT companies are in focus ahead of their Q4 earnings which be kickstarted by the giant Tata Consultancy Services (TCS) on April 12. The majority of these tech players have declared the Q4 dates and proposed dividend rewards, while others will follow suit. Ahead of their earnings, leading global brokerage JP Morgan has announced its recommendations on Indian IT stocks.
1. Tata Consultancy Services (TCS):
India's largest IT firm and second largest company in terms of market share, will kick start the Q4 earnings season on April 12 with its last quarterly financial results for FY24.
TCS will not only present its Q4FY24 results in April, but its board of directors will also consider the final dividend if any, on the equity shares of the company for the fiscal year.
So far in FY24, TCS has paid up to 4,500% dividend amounting to Rs 45 per share. This included a special interim dividend of Rs 18 per share as well, with its first, second, and third interim dividend payouts of Rs 9 per share each.
Currently, TCS has a dividend yield of 2.87%. Its stock price is at Rs 4,003.05 apiece at present with a market value of Rs 14,48,338.52 crore.
JP Morgan has maintained Neutral on the company while raising its target price of Rs 4,000 per share with a positive outlook. TCS has already touched this target price on April 4th.
The highest target price on TCS is of Rs 4,750 set by Sharekhan with a BUY recommendation.
2. Infosys:
TCS' direct rival is Infosys and the latter will announce its Q4 results on April 18th. However, unlike the Tata Group-backed player, Infosys has not intimated about any proposal related to dividend rewards.
Currently, Infosys shares are at Rs 1,486.60 apiece with a market cap of Rs 6,17,067.96 crore.
JP Morgan has maintained an overweight on Infosys with a target price of Rs 1,800 per share. The outlook is positive.
3. Wipro:
Azim Premji-backed Wipro will announce its Q4 results on April 19th. However, Wipro has not intimated about any dividend payout for the last quarter as of now. Currently, its stock price is at Rs 487.50 apiece with a market cap of Rs 2,54,725.49 crore.
JP Morgan has maintained Neutrality on Wipro and further cut its target price to Rs 480 per share. Notably, Wipro is currently trading above JP Morgan's target.
4. Persistent Systems:
Persistent has turned ex-split on April 1 for its sub-division ratio of 1:5. The company's 1 share with a face value of Rs 10 each has been split into 5 new shares with a face value of Rs 2 each.
Right after the split, Persistent has rescheduled its Q4 results date to April 21. Also, on this day, Persistent has announced the proposal for dividend payout. Earlier this year, Persistent paid an interim dividend of Rs 32 per share or 320% for FY24, after paying 500% or Rs 50 per share dividend in FY23.
Its dividend yield is at 0.62%. Currently, Persistent's share price is at Rs 4029.50 apiece with a market cap of Rs 62,074.45 crore.
JP has upgraded its stance from Persistent to Overweight and also raised its target price of Rs 4,400 per share. The outlook is positive.
6. L&T Technology Services (LTTS):
Next up is L&T Group-backed LTTS which is scheduled to declare its Q4 earnings report on April 25.
This L&T stock is also planning to deliver the final dividend for FY24 on April 25. Earlier, for the same fiscal, LTTS paid an interim dividend of Rs 17 per share or 850%. It has a dividend yield of 0.77%, while its current market price is at Rs 5829.80 apiece with a market cap of Rs 61,652.37 crore.
JP Morgan maintained an Overweight on the company while raising its target price to Rs 5900/sh with a Positive outlook.
7. Tech Mahindra:
On the same day as LTTDS, Mahindra Group-backed IT flagship company, Tech Mahindra will announce its Q4 results on April 25.
Tech Mahindra is also planning to pay final dividend rewards for FY24 to its shareholders. Earlier, in the FY24 period, Tech Mahindra paid dividends up to 240% aggregating to Rs 12 per share. The company has one of the highest dividend yield of 3.91%.
Currently, the share price of Tech Mahindra is at Rs 1278.65 apiece with a market cap of Rs 1,24,893.23 crore.
However, unlike its peers, JP Morgan maintained an 'underweight' on Tech Mahindra shares and trimmed its target price to Rs 480 per share with a Neutral outlook.
8. HCL Technologies:
HCL, the third largest IT company in India, announced that the board meeting is scheduled on April 25 & 26, 2024 to consider Q4 financial results. The company also announced that it will consider payment of an interim dividend for FY25.
Hence, HCL will be the first among its peers to announce rewards for FY25. Last year, HCL Tech paid dividends up to Rs 52 per share. Currently, it has a dividend yield of 3.12%.
HCL's stock price is at Rs 1539.65 apiece with a market cap of Rs 4,17,809.45 crore.
JP Morgan has maintained Neutral on the company, however, cut the target price at Rs 1480/share.
9. Coforge:
This IT company is scheduled to announce Q4 results and dividend rewards on May 2nd.
Coforge is among the dividend-paying stocks. Last year, Coforge paid a total of 950% or Rs 95 dividend per share. Currently, it has a dividend yield of 1.1%. Its share price is at Rs 5817.15 apiece, with a market cap of Rs 35,962.20 crore.
JP has initiated Overweight on Coforge, for a target price of Rs 7000/share with a positive outlook.
Other IT stocks recommendation by JP Morgan:
KPIT Tech: The company will announce its Q4 results on April 29. JP has upgraded its rating on KPIT to Neutral while raising the target price to Rs 1,400 per share with a positive outlook.
Cyient: JP maintained an overweight on the company for a target price of Rs 2,600 per share with a positive outlook.
LTMindtree: JP upgraded its rating to Neutral on the company, however, cut its target price to Rs 5,200 per share. The outlook is still positive.
MPhasis: The brokerage maintained neutral on the company for a target price of Rs 2,600 per share.
Tata Technologies: JP maintained an underweight on the company for a target price of Rs 800 per share.
Tata Elxsi: The brokerage lastly maintained an Underweight on the company for a target price of Rs 6,000 per share.
Disclaimer The recommendations made above are by market analysts and are not advised by either the author nor Greynium Information Technologies. The author, nor the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.
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