Prabhudas Lilladher upgrades TCS to ‘Accumulate’ with target of Rs 500
Prabhudas Lilladher has upgraded its rating on the Tata Consultancy Services to ‘Accumulate’ with a price targe of Rs 500 per share.
By ET Bureau |
MUMBAI: Prabhudas Lilladher has upgraded its rating on the Tata Consultancy Services to ���Accumulate��� with a price targe of Rs 500 per share.
The company announced surprisingly strong results in Q1FY10. Revenue grew by 0.5% QoQ (v/s an expected decline of 1.8%) and PAT grew by 15.7% QoQ (v/s an expected decline of 4.0%). EBITDA margins expanded by 100 bps QoQ, despite this being the first quarter of the year.
���Despite the uncertain outlook, we believe that TCS stock is attractive as valuations are yet to reflect the company���s better-than-peer performance. At 15.0x FY10E and 13.0x FY11E earnings, TCS��� valuation gap to Infosys is high given its better earnings performance. We upgrade the rating to ���Accumulate���, with a price target of Rs 500,��� the brokerage said.
The company announced surprisingly strong results in Q1FY10. Revenue grew by 0.5% QoQ (v/s an expected decline of 1.8%) and PAT grew by 15.7% QoQ (v/s an expected decline of 4.0%). EBITDA margins expanded by 100 bps QoQ, despite this being the first quarter of the year.
���Despite the uncertain outlook, we believe that TCS stock is attractive as valuations are yet to reflect the company���s better-than-peer performance. At 15.0x FY10E and 13.0x FY11E earnings, TCS��� valuation gap to Infosys is high given its better earnings performance. We upgrade the rating to ���Accumulate���, with a price target of Rs 500,��� the brokerage said.
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