TCS Q2 earnings: Analysts' views

Ankita Somani, Analyst - IT and Telecom at Angel Broking

TCS reported yet another healthy quarterly result. The most remarkable thing was 5 per cent QoQ volume growth. The dollar revenue grew by 4.5 per cent QoQ to US$2,853 million. The EBIT margin of the company declined by 70 bps QoQ to 26.8 per cent, a bit disappointing from our estimate of 27.2%, because of onsite effort shift and slight business mix shift towards emerging geographies.

Overall the results were encouraging with management commentary indicating that the company would be able to grow higher than industry. TCS continued its growth momentum.

Investors can accumulate TCS with a target of Rs1450-1500 for the next 2-3 months. Traders need to protect downside with stoploss below 1220 on closing basis.

Sanjeev Agarwal, MD at Dynamix Research & Capital Management Pvt Ltd

IT sector is correcting a bit after a strong rally. As USD is now starting to pull back after correction, IT sector should bounce back in short term again as its margins are quite dependent on USD moves.

TCS has gained the status of IT bellwether from Infosys some time back and rightly so as its performance is on upswing regularly. We expect that it will maintain that lead in near future also. After making a high of Rs 1440 earlier TCS is taking good support on its 100-DMA around Rs1275.