Domestic brokerage Anand Rathi has recommended buy on TCS shares with target price of Rs4,350 per share. India's biggest IT company had reported a 7.4% rise in March-quarter profit on Monday, kicking off the earnings season. Mumbai-based TCS reported a net profit of Rs9,926 crore for the three months to March 31, up from Rs9,246 crore, a year earlier, slightly lower than analyst estimates of Rs10,001 crore. 

“With continuity of robust growth across segments, we expect the growth momentum to continue in the medium term supported by strong deal pipeline and ramp up of large deals. We recommend BUY rating on the stock with a revised target price of Rs.4,350 per share," the brokerage said.

TCS share prices had settled 0.7% lower at Rs3,664.95 on Wednesday.  On a year-to-basis, its shares are down about 2%. 

V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, says “TCS results are in line with expectations. This can support IT stocks even if there is some profit booking."

TCS said it posted its highest-ever order book total contract value of $11.3 billion in the quarter, the company said. The management sounded bullish on demand for IT services at a time when companies across the globe are grappling with cost pressures. 

"Increasing participation in our customers' growth and transformation journeys, and an all-time high order book provide a strong and sustainable foundation for continued growth ahead," TCS' Chief Executive Officer Rajesh Gopinathan said in a statement.

TCS revenue from operations jumped 15.8% to Rs50,591 crore while banking and finance segment revenue rose 11.2% to Rs19,532 crore. The IT company also recommended a final dividend of Rs22 per share.

“TCS EBIT margin during the quarter were flat at 25% QoQ. During the quarter there was pressure on margins due to supply side challenges which were mitigated from operational efficiencies and currency support," Anand Rathi said. 

“On the people front the company saw all-time high net additions in the quarter at 35,309 during Q4FY22 bringing the total headcount to ~592,000. During the quarter, LTM attrition was at 17.4%. However the incremental attrition has moderated."

Another brokerage Motilal Oswal is also also positive on TCS shares with a target price of Rs4240. “We maintain our positive stance on TCS, given its strong growth outlook.  IT Services has entered into a technology upcycle, with Cloud migration and Digital transformation-led deals coming into the market. - Given TCS’ size, capabilities, and portfolio stretch, it is rightly positioned to leverage anticipated industry growth," the brokerage said. 

“This renders the company with ample room to maintain its industry-leading margin and demonstrate superior return ratios."