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

REUTERS SHOWCASE

School Shooting

School Shooting

Two killed, four wounded in Washington state school shooting.  Full Article 

Sundar Pichai Elevated

Sundar Pichai Elevated

Google's Pichai to oversee major products and services.  Full Article 

Need For Reforms

Need For Reforms

Euro zone risks "relapse into recession" without structural reforms - Draghi.  Full Article 

Diwali Sales

Diwali Sales

Gold sales jump about 20 pct for Diwali - trade body  Full Article 

World Bank Rival

World Bank Rival

Three major nations absent as China launches W.Bank rival in Asia  Full Article 

Wal-Mart India

Wal-Mart India

Murali Lanka appointed as Wal-Mart India operations chief  Full Article 

Health Of Lenders

Health Of Lenders

25 European banks set to fail health checks - sources.  Full Article 

Special Report

Special Report

Why Madrid's poor fear Goldman Sachs and Blackstone  Full Article 

India Insight

India Insight

Kalki Koechlin on her role as a disabled girl in “Margarita, With a Straw”  Full Article 

Reuters India Mobile

Reuters India Mobile

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