TCS up after results; HSBC, CLSA upgrade ratings

MUMBAI Tue Jan 15, 2013 1:51pm IST

Logos of Tata Consultancy Services (TCS) are displayed at the venue of the annual general meeting of the software services provider in Mumbai, June 29, 2012. REUTERS/Vivek Prakash/Files

Logos of Tata Consultancy Services (TCS) are displayed at the venue of the annual general meeting of the software services provider in Mumbai, June 29, 2012.

Credit: Reuters/Vivek Prakash/Files

Related Topics

Stocks

   

MUMBAI (Reuters) - India's largest software services exporter Tata Consultancy Services (TCS) gained the most in more than eight months in Mumbai trading after posting better-than-expected earnings and prompting a raft of analyst upgrades.

HSBC upgraded TCS to "overweight" from "neutral," and "modestly" increased its profit outlook for the year ending March 2014 by 2 percentage points, citing improving margins and an expected rise in demand.

CLSA described the quarterly earnings as "picture perfect" and upgraded the stock to "outperform" from "sell."

TCS reported on Monday a 23 percent rise in quarterly profit from a year earlier and reiterated it should beat a closely watched industry growth forecast.

Its shares advanced as much as 4.9 percent on Tuesday, the most since April 24 last year, and were up 2.1 percent as of 11:51 a.m.

However, Barclays Capital kept TCS at "equalweight," saying the company's revenue growth of 3.3 percent quarter-on-quarter was slightly below its forecast.

"While passing muster versus our estimates, TCS' results paled compared to the revenue growth posted by Infosys last week," Barclays analysts wrote in a note.

Infosys posted a 4.2 percent gain in revenue for the quarter ended December compared with the previous three months.

The mixed analyst reaction to TCS came after the software services exporter consistently topped estimates with its earnings last year.

Other analysts reiterated their bullish calls on TCS, with brokerage Jefferies maintaining a "buy" rating.

"TCS has delivered quarter after quarter, justifying premium valuations over peers. Our view has been that 2013 is likely to be a better year for Indian IT as far as demand is concerned," Jefferies wrote in a note.

Shares in Infosys fell 0.4 percent after surging 21 percent since Friday when the company announced its third-quarter earnings.

(Reporting by Rafael Nam and Abhishek Vishnoi; Editing by Ryan Woo)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

REUTERS EXCLUSIVE

REUTERS SHOWCASE

Modi In U.S.

Modi In U.S.

Obama, Modi work to deepen improving U.S.-India ties  Full Article | Related Story 

Factory Activity

Factory Activity

Factories expand at slowest pace this year in September  Full Article 

Videocon d2h IPO

Videocon d2h IPO

Videocon d2h files for up to $113 million IPOs  Full Article 

Asian Economy

Asian Economy

Asian factories slow in Sept, push inflation ever lower  Full Article 

EBay Divests PayPal

EBay Divests PayPal

EBay follows Icahn's advice, plans PayPal spinoff in 2015  Full Article 

New 'Windows'

New 'Windows'

Microsoft names next operating system 'Windows 10'.  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage