2022 hasn’t been the year for information technology (IT) stocks. Shares of IT behemoth Tata Consultancy Services (TCS) also felt the pain this year. Though, the fall in TCS was lower than its peers, which slipped up to 21.85 per cent in 2022 so far.
On a year-to-date (YTD) basis, TCS has fallen 14.64 per cent so far this calendar, which is lower than Infosys’ 20.12 per cent and HCL Technologies’ 21.85 per cent drop, respectively.
An improvement in attrition and easing of supply-side issues could be seen as triggers for the stock, going ahead. Technical analysts largely said that the stock looked ‘weak’ for now, suggesting an immediate hurdle at Rs 3,300 level.
Support for the stock is seen at Rs 3,160, followed by Rs 2,950.
Osho Krishan, Senior Analyst – Technical & Derivative Research at Angel One, said, “TCS is hovering below all its major moving averages on the daily chart and is also in the cycle of lower lows formation. The recent swing low of Rs 3,160 could be seen as immediate support, breaching which the stock may plunge further. On the flip side, the bullish gap at around Rs 3,300 is expected to be seen as an intermediate hurdle that even coincides with the 200-SMA (Simple Moving Average).”
Krishan also stated that the stock is expected to remain under pressure until the hurdle is not taken out decisively.
Anand James, Chief Market Strategist at Geojit Financial Services, said, “There is some weakness now, but if the stock doesn’t fall below Rs 3,235, we can expect a renewal in the uptrend.” In such a case, James said, the stock can aim for Rs 3,400 in the next two months.
A R Ramachandran from Tips2trades, said the stock has held on to its crucial support of Rs 2,950 while ensuring that it would end 2022 well compared to its peers.
On the downside, Ramachandran felt a close below Rs 2,950 could lead to a lower target of Rs 2,600 in the near term.
Ashika Institutional Equity Research has given a ‘Buy’ call on the counter, with a target price of Rs 3,672, which suggests a potential upside of 14 per cent.
“2023 will be a more balanced year in terms of growth and earnings. Improvement in attrition, supply-side issues, and other costs will lead to margin recovery in the coming quarters,” the brokerage noted.
“TCS remains confident to reach its FY30 revenue guidance of $50 billion irrespective of near-term headwinds indicating the long-term story is still intact, which translates to a CAGR of (9-11 per cent) and doubling topline from FY22 base,” Ashika added.
Shares of TCS settled marginally higher today. The stock crawled 0.10 per cent to close at Rs 3,259.05 over its previous close of Rs 3,255.85.
Meanwhile, Indian equity benchmarks settled higher today, led by strong buying interest in metal stocks.
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