1:1 Bonus, Rs 28/Share Dividend: Buy Tata Group IT Giant After Latest AI Update, TP Rs 4344

Geojit Financial Services is upbeat on Tata Group IT sector company, Tata Consultancy Services Ltd share and recommended buy call with target price of Rs 4344 apiece. Current market price of Tata Consultancy Services share on BSE is Rs 3812.85 per share as on April 26, 2024. TCS on April 12, 2024 recommended a final dividend of Rs 28 per equity share of Re 1 each of the company. TCS share offered return of 14% in last 6-months and 19% in last 1-year. More details below:

TCS, AWS Ink Strategic Agreement To Offer Access to GenAI Solutions To Customers: As per the media release issued as on April 24, 2024, "Tata Consultancy Services entered into a strategic partnership with Amazon Web Services (AWS) to accelerate its customers' cloud transformation journey at scale. This new strategic transformation agreement with AWS will enable TCS to facilitate full-stack digital transformation of its customers by leveraging data and generative artificial intelligence (AI) solutions on AWS."

Through this multi-year tie-up, TCS will provide its customers with tools to create modern architectures, deliver business value using state-of-the-art cloud-native capabilities and drive modernization at scale. These include a clear cloud modernization roadmap, access to modernization platforms and tools, exclusive investment models and technology betas, and proof-of-concept (POC) projects.

Krishna Mohan, Deputy Head, AI.Cloud Unit, TCS, said, "We are excited about the unique value proposition that our clients will have access to, through this agreement between TCS and AWS to take advantage of TCS' contextual knowledge.. It offers an opportunity to drive significant value by accessing innovative technologies such as generative AI and modernization at scale for our clients globally."

Geojit Recommends Buy Call: Revenue growth may remain subdued in the near term. However, the company's robust order book, strategic partnerships and widening margins auger well for its future performance. Hence, we remain optimistic and maintain our BUY rating on the stock, with a revised target price of Rs. 4,344 based on 27x FY26E adj. EPS.

TCS Q4 Results: Earlier on April 12, TCS announced a net profit of Rs 12,434 crore, up 9.1% year-on-year (Y-o-Y). Sequentially, the IT Software company's profit after tax soared 6% from Rs 11,735 crore. Its revenue for the quarter surged 3.5% YoY to Rs 61,237 crore. Sequentially, it surged 1%. The company inked one of its highest total contract values (TCV) worth $13.2 billion for the Q4 of FY24. For FY24, TCS declared its order book at $42.7 billion, highest so far.

TCS Share Performance: The 52-week high price of Tata Consultancy Services share on BSE is Rs 4254.45 apiece (as on 18/03/2024) and 52-week low price is Rs 3,156.20 per share (as on 16/06/2023), respectively. The large cap IT Software giant of Tata Group has a market capitalisation of Rs 13,79,522.50 crore. The stock has a PE of 33.22 and EPS (TTM) of 31.48. Tata Consultancy Services shares fell 4.69% in last 2-weeks, soared 8% in last 2-years, and surged nearly 70% in last 5-years.

TCS Bonus Share History: The IT company announced 3 bonus issues since July 28, 2006. Last bonus issue of TCS was declared in the ratio of 1:1 with ex-date declared as May 31, 2018, according to data available at Trendlyne.

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