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Showing posts with label TCS. Show all posts

Friday, July 6, 2018

TCS hits fresh record high; brokerages betting on strong Q1 earnings growth

TCS, which alone constitutes 40 percent of the sector’s PAT, will derive 60 percent of incremental profits in 1QFY19, according to analyst estimates

TCS created history on Friday as it touched a fresh record high above Rs 1,900 per share, supported by expectations of strong growth in the June quarter and depreciation in the rupee against the dollar.

The IT bellwether hit a fresh record high of Rs 1,916.15 per share on the BSE. The stock has been in an uptrend in 2018, up over 40 percent in the first six months. Indian largest software exporter holds the tag of India’s most valued company with a market capitalisation of Rs 7.2 lakh crore, followed by Reliance Industries, HDFC Bank, ITC, and HDFC.

TCS reported a 5.7 percent sequential rise in net profit in its fourth quarter to Rs 6,904 crore, beating analyst expectations in the March quarter. Revenue for the quarter rose 3.8 percent sequentially to Rs 32,075 crore for the quarter-ended March 31.

Brokerages expect over 3 percent sequential growth for the June quarter, above peers such as Infosys and HCL Technologies.

Jefferies said TCS may report a 3.8 percent quarter-on-quarter constant currency growth in Q1. It added that Wipro and Tech Mahindra may lag with just 1-1.2 percent decline and Infosys and HCL Technologies in between. “The cross-currency impact should drag reported QoQ dollar growth by another 90-150 bps. The weakness in margin on wage hike and visa costs should be offset by depreciation in the rupee.”

TCS, which alone constitutes to 40 percent of the sector’s profit after tax, will derive 60 percent of incremental profits in Q1 FY19, it estimated. “Bottoming cyclical pressures and improved capital allocation are factors that will feed into valuation multiples favourably, whereas currency keeps earnings growth ticking further.”

Motilal Oswal said in a recent report that barring banking and financial services and retail, all segments for TCS were growing in healthy single or double-digits, on the back of revival in retail and a slew of large deal announcements “We expect 3.3% QoQ CC growth in Q1. This signifies an acceleration compared to the 2 percent QoQ CC growth witnessed in Q4 FY18.”

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Source:https://www.moneycontrol.com/news/business/stocks/tcs-hits-fresh-record-high-brokerages-betting-on-strong-q1-earnings-growth-2679521.html

Monday, June 25, 2018

Market Update: Nifty pharma outperforms led by Cadila Health; Idea tanks 6%, Tata Motors top loser

The breadth of the market favoured declines, with 776 stocks advancing, 827 declining and 466 remaining unchanged. On BSE, 995 stocks advanced, 949 declined and 112 remained unchanged.The broader indices including the Nifty and the Sensex are trading on a flat to negative note this Monday morning with the Nifty down 14 points at 10,807 and the Sensex is trading lower by 62 points at 35,628.

Nifty pharma outperforms led by Cadila Healthcare, Glenmark Pharma, Lupin and Sun Pharma.

Nifty auto is down almost 1 percent dragged by Tata Motors, Tata Motors DVR, Motherson Sumi Systems, Amara Raja Batteries and Hero MotoCorp among others.

Bank Nifty is trading weak with stocks like Axis Bank, ICICI Bank, Bank of Baroda, Punjab National Bank and State Bank of India shedding up to 1 percent each.

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Source: https://www.moneycontrol.com/news/business/markets/market-update-nifty-pharma-outperforms-led-by-cadila-health-idea-tanks-6-tata-motors-top-loser-2628771.html

Thursday, June 21, 2018

ICICI Bank may appoint MD Mallya as new chairman: Report

ICICI BANK may appoint former Bank of Baroda Chairman and Managing Director MD Mallya as a sucessor to the current ICICI Bank Chairman MK Sharma when his term ends on June 30.

The bank has sought the Reserve Bank of India’s (RBI’s) approval for the same in the first week of June, reported Mint quoting sources.

Moneycontrol could not independently confirm the development.

Mallya is currently an independent director on ICICI Bank's board.

“I believe the proposal was sent to RBI after discussing with the board. The majority of the board is in favour of Mallya as the chairman. The RBI decision has to concur with board’s proposal in such matters. (Still) the bank is yet to hear from RBI,” an executive familiar with the development told the paper on condition of anonymity.

As per the report, RBI and ICICI Bank did not reply to an email query

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Source: https://www.moneycontrol.com/news/business/icici-bank-may-appoint-md-mallya-as-new-chairman-report-2614861.html

Opening Bell (21 June 2018)

Friday, June 15, 2018

Closing Bell (15 June 2018)

CLOSING BELL:-

SENSEX UP +22.32 @ 35622.14

NIFTY FUTURE UP +4.90 @ 10818.50

BANKNIFTY FUTURE DOWN -173.00 @ 26407.90

MCX SUPPORT & RESISTANCE LEVEL

Thursday, June 14, 2018

Sensex drops 100 pts, Nifty below 10,850; Infosys dips 2%

NEW DELHI: Benchmark indices Sensex and Nifty on Thursday opened on a poor note after the US Federal Reserve hiked interest rates for the second time this year and hinted at two more such hikes in the remainder of 2018. Concerns over widening current account deficit (CAD) at home and data showing lower-than-expected Chinese factory output growth too weighed on the sentiment. Besides, all eyes were on US President Donald Trump's meet with his top trade advisers later in the day to decide on tariffs on Chinese goods. At 9.26 am, the BSE Sensex was trading 95.84 points, or 0.27 per cent, lower at 35,642.40. Nifty50 was ruling at 10,820.90, down 35.80 points, or 0.33 per cent. IT stocks fell as rupee appreciated against the US dollar in morning trade. Wipro was the top Sensex loser with 1 per cent drop. TCS and Infosys too declined up to 0.9 per cent. SBI, Axis Bank, ICICI Bank, NTPC and Reliance Industries shed up to 0.7 per cent. On the upside, Bharti Airtel advanced 1.57 per cent to Rs 382. Dr Reddy's Labs gained 1.38 per cent to Rs 2,283.10. Sun Pharma, ONGC and HDFC Bnk added up to 0.7 per cent. Asian markets were down up to 0.7 per cent. Earlier in the morning, China reported lower than retail sales in May grew to 8.5 per cent. This is against an expectation of 9.6 per cent. Factory output growth for the country during the same month stood at 6.8 per cent. This was against an expectation of 7 per cent. Domestic imbalance in development still exits, it said.

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Wednesday, June 13, 2018

TCS rallies on news of a possible buyback; Morgan Stanley raises target price

The stock has been in an uptrend so far in the year 2018, up 34 percent while on a 1-year basis, the stocks rose by nearly 50 percent. The stock is trading near its record high of Rs 1.837.

TCS rallied nearly 2 percent in morning trade on Wednesday after India’s largest software exporter said that its board will meet on Friday to consider a proposal to buy back shares. "... the Board of Directors will consider a proposal for buyback of equity shares of the Company, at its meeting to be held on June 15, 2018," TCS said in a filing late Tuesday. Media sources peg the buyback to the extent of Rs 10,000 crore. TCS has said previously that it will pay out 100 percent of its free cash flows to shareholders. In the 2017-18 financial year, TCS made a 118 percent payout. The stock has been in an uptrend so far in the year 2018, up 34 percent while on a 1-year basis, the stocks rose by nearly 50 percent. The stock is trading near its record high of Rs 1.837.

Last year, TCS announced a Rs 16,000-crore mega share buyback at Rs 2,850 apiece that closed on May 31. “For FY19, we have factored total payout of Rs 23,900 crore, in-line with TCS’s outlook for a payout of 80%-100% of FCF,” Urmil Shah, research analyst at IDBI Capital said.

“We see a high probability of the quantum of buyback in this year being at least at the same level as in FY18 or Rs 16,000 crore. If the buyback is done at Rs 1800 (near to CMP of Rs1,781), TCS would be able to buy back 2.32 percent of its outstanding shares,” he said.

IDBI Capital maintains a positive outlook on TCS as it forecasts to deliver the best YoY improvement in revenue growth in FY19 amongst large-caps. The brokerage firm maintains and ‘Accumulate’ rating on TCS with a target price of Rs1,731 based on 20x FY20E.

The latest buyback program from TCS is in line with management stated strategy of giving back 80-100 percent of free cash flows (FCF) to shareholders. In the last five years, TCS average FCF pay-out was around 80%.

“Last year, TCS had bought back 5.6 crore equity shares, representing around 2.85% of its total equity for around Rs 16,000 crore, which was around 118% of its FCF. We also expect Infosys, to come out with buyback program sometime in this year,” Sharekhan said in a note.

“As management has earlier indicated at return back to shareholders around $2 bn, and 70 percent of FCF (last year Infosys has also taken up the buyback program to the tune of Rs13000 crore.),” he said.

The global brokerage firm, Morgan Stanley maintains its overweight rating on TCS but raised its 12-month target price to Rs 2,010 from Rs 1,825 earlier which translates into an upside of 12 percent upside in the next 12 months.

There are many tailwinds which could take the stock higher such as strong global growth, US economy doing well, digital adoption and rupee depreciating.

Morgan Stanley expects margins can move toward 26-28 percent. The global investment bank raised EPS estimates by 4-5 percent to factor gains from rupee depreciation. The valuation should reflect superior profile, said the note.

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