UPDATE 1-India's Tata Consultancy shares surge; HSBC, CLSA lift ratings

Tue Jan 15, 2013 12:34pm IST

Related Topics

Stocks

   

* TCS shares gain after Oct-Dec earnings

* CLSA, Jefferies upbeat about outlook

* Barclays warns about revenue growth (Adds comments from analysts)

MUMBAI, Jan 15 (Reuters) - India's largest software services exporter Tata Consultancy Services Ltd (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 0621 GMT.

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

Drug Pricing

REUTERS SHOWCASE

 G20 Meet

G20 Meet

As G20 chases growth goal, members differ on how to get there   Full Article 

Modi Speaks

Modi Speaks

PM Modi says al Qaeda will fail in India - CNN.  Full Article 

Alibaba Listing

Alibaba Listing

Alibaba surges on massive demand in trading debut  Full Article 

Importing Rice

Importing Rice

Top rice exporter India importing over 100,000 T on temporary supply squeeze.  Full Article 

GSK Fined

GSK Fined

China hands drugmaker GSK record $489 mln fine, sentences executives.  Full Article 

HMT in Demand

HMT in Demand

Fans rush to HMT as watchmaker marks time.  Full Article 

Apple Not Cool?

Apple Not Cool?

Some consumers say Apple is losing its "cool" factor  Full Article 

Reuters India Mobile

Reuters India Mobile

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