Brokerage firms remained bullish on IT major Tata Consultancy Services (TCS) after it reported a strong set of numbers this quarter, with revenue growth and margin performance beating expectations. Some of them also raised their target price for the stock.

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TCS reported ended FY19 with double-digit revenue growth, reporting a 11.4 percent growth in constant currency terms in FY19. Earnings growth for FY 19 was at 21.8 percent. For the March quarter, it reported a 17.7 percent year-on-year (YoY) jump in consolidated net profit at Rs 8,126 crore for the fourth quarter ended March 2019. In the corresponding quarter last year, the company posted a net profit of Rs 6,904 crore. Revenue for the quarter rose 18.5 percent YoY to Rs 38,010 crore.

Though the EBIT margin of the company was marginally down at 25.2 percent against expectations of 25.7 percent.

Reacting to the results, most brokerages upgraded the stock and raised their 12-month target. They expect the company to post double-digit revenue growth in FY20 as well led by strong wins, improving year-on-year growth in BFSI, all-round vertical growth, and rising digital revenue.

"High payouts to shareholders in the form of buybacks, along with good visibility will ensure the stock remains at elevated valuations. Rolling over our estimates to FY21, we maintain our BUY recommendation on the stock with a revised target Price of Rs 2,300 (from Rs 2,190 earlier)," said Reliance Securities in a note.

Morgan Stanley maintained its Equal-Weight rating on TCS after Q4 results but raised its 12-month target price of Rs 1,980 from Rs 1,920 earlier. Morgan Stanley’s FY20 constant currency revenue growth of 10 percent remains unchanged. However, the margin may remain below the 26-28 percent aspirational band. The global investment bank kept EPS estimates for FY20 and FY21 largely unchanged.

Centrum is also bullish on the stock. It believes that TCS could again widen its premium with respect to Infosys post strong Q4 execution and stable margin despite challenges from rupee appreciation, maintaining a buy call on the stock.

CLSA also retained its buy rating on CLSA with a target price of Rs 2,460. It said revenue beat with margin defence and strong deal win along with a stable outlook were some of the key positives.

Meanwhile, Credit Suisse was neutral on TCS but raised its 12-month target price to Rs 2,130 from Rs 1,900 earlier. The brokerage expects TCS to clock 11 percent growth in FY20. It increased the target multiple to 21x from 20x on strong outlook and added that the company's valuations are steep but have cooled off from last year's near-all-time highs.

Nomura also upgraded TCS to Neutral from reduce earlier and raised its target price from Rs 1,780 to Rs 1,925 per share.

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