Analysts have mixed outlook on TCS post weak Q2

Analysts at top brokerage firms trimmed or retained their price targets on TCS after the software services exporter posted weaker-than-expected second-quarter earnings. The stock fell 1.9% to `3,542 on Thursday in response to the results. Infosys shares dropped 2%, Tech Mahindra declined 2.7%, and HCL Tech fell 1.7%. ET looks at the brokerage commentary on TCS:

KOTAK

• Near-term outlook weak and disappointing but does not dent hopes for a better FY25
• Stock at premium valuations; justified but limits significant near-term upside

JEFFERIES

• TCS’ Q2 does not inspire confidence about demand recovery
• Premium valuation of 27 times P/E ratio limits upside

MORGAN STANLEY

• Revenue downgrade cycle, recent stock outperformance and premium valuations make risk-reward less favourable.
• Consensus EPS to drop; weak revenue commentary to weigh on P/E multiples