Tata Consultancy Services Ltd (TCS), a prominent player in the Indian IT sector, witnessed an optimistic turn as Morgan Stanley revised its target value for major IT stocks, citing enhanced growth visibility and reasonable margin expectations. The Indian IT services sector remains promising, prompting investors to consider specific stocks despite their high valuations, as stated in a note by the brokerage firm on March 7, 2024.
Tata Consultancy Services Ltd (TCS): Market Overview:
TCS, listed on the National Stock Exchange (NSE), closed at ₹4,064.30 in the previous session, within a day range of ₹4,037.70 to ₹4,124.00. The company’s stock has witnessed fluctuations within a year range of ₹3,070.25 to ₹4,184.75, with a market capitalization of ₹14.87 trillion INR and a P/E ratio of 33.46, alongside a dividend yield of 1.24%.
Tata Consultancy Services Ltd (TCS): Stock Specific News:
Morgan Stanley’s decision to raise the target value for IT stocks stems from its positive outlook on the sector, highlighting increased growth potential and reasonable margin projections. TCS, along with other key players like Wipro, stands to benefit from this revised evaluation. The brokerage firm’s endorsement underscores the robustness of India’s IT services industry, despite concerns about elevated valuations.
Financial Statements:
1. Annual Income Statement (INR) 2023:
| (INR) | 2023 | Y/Y CHANGE |
|---|---|---|
| Revenue | 2.25T | 17.58% |
| Operating expense | 418.18B | 20.89% |
| Net income | 421.47B | 9.97% |
| Net profit margin | 18.69 | -6.50% |
| Earnings per share | 115.19 | 11.17% |
| EBITDA | 576.25B | 11.92% |
| Effective tax rate | 25.66% | — |
2. Annual Balance Sheet (INR) 2023:
| INR | 2023 | Y/Y CHANGE |
|---|---|---|
| Cash and short-term investments | 455.26B | 2.08% |
| Total assets | 1.44T | 1.51% |
| Total liabilities | 524.45B | 1.50% |
| Total equity | 912.06B | — |
| Shares outstanding | 3.66B | — |
| Price to book | 16.45 | — |
| Return on assets | 23.77% | — |
| Return on capital | 34.49% | — |
3. Annual Cash Flow (INR) 2023:
| (INR) | 2023 | Y/Y CHANGE |
|---|---|---|
| Net income | 421.47B | 9.97% |
| Cash from operations | 419.65B | 5.05% |
| Cash from investing | 390.00M | 104.35% |
| Cash from financing | -478.78B | -42.57% |
| Net change in cash | -53.65B | -195.29% |
| Free cash flow | 356.87B | -7.43% |
Outlook and Conclusion:
TCS, along with other major players in the Indian IT sector, remains poised for growth amid favorable market sentiments and increased investor confidence. Morgan Stanley’s upward revision of target values reflects a positive outlook for the sector, emphasizing sustained growth prospects despite prevailing market conditions. Investors may continue to monitor developments in the Indian IT landscape as the sector navigates through evolving challenges and opportunities.
Disclaimer:
The information provided herein is for informational purposes only and should not be construed as financial advice. Investors are encouraged to conduct thorough research and seek professional guidance before making investment decisions.
