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Brokerages retained their bullish view on Tata Consultancy Services (TCS) after it posted better-than-expected financial results for the quarter ended March 31. The country’s largest software services firm on Monday reported a 14.9% growth in consolidated net profit to Rs 9,246 crore against Rs 8,049 crore in the year-ago period. The revenue of the IT major increased by 9.4% in the quarter under review to Rs 43,705 crore from Rs 39,946 crore a year ago.

IDBI Capital Markets has an ‘Accumulate’ rating on the counter with a price target of Rs 3,530. “TCS reported a third consecutive quarter of all-round performance in Q4FY21. TCS has maintained its positive outlook and is confident of achieving double-digit YoY revenue growth in CC (constant currency) for FY22,” the brokerage said.

Shares of the company traded 3.45% lower at Rs 3,129.75 at around 9.23 am (IST). On the other hand, the benchmark BSE Sensex was up 0.37% higher at 48,062 at around the same time. Overseas financial firms including JP Morgan (Target price: Rs 3640), CLSA (Rs 3,560), Macquarie (Rs 3,640) and Credit Suisse (Rs 3,750) also retained ‘Outperform’ call on TCS. On the other hand, Goldman Sachs holds a ‘Buy’ rating on TCS with a target price of Rs 3,646.

The board has also proposed a final dividend of Rs 15 per equity share. The net profit for the fiscal ended March 2021 was up at Rs 33,388 crore (excluding legal claim provisions), from Rs 32,340 crore in the previous financial year. Its net profit on a reported basis stood at Rs 32,430 crore for FY21.

In the fourth quarter, TCS added 19,388 employees to its rolls on a net basis, its highest ever net addition in a quarter, taking the total headcount to 4,88,649. IT services attrition rate (LTM) was at 7.2%.

Antique Stock Broking added that the strong results were helped by demand for core transformation services, market share gains and ramp-up of two large deals-Prudential Financial and Postbank Systems.

Management of the IT major also reiterated that they are at the start of the first phase of a multi-year technology transformation cycle and the pandemic has provided the right fillip for large-scale adoption of digital technologies. The company is confident to achieve double-digit growth for FY22E as they continue to see wins around core transformation including cloud migration, application modernisation and data modernisation.

“We remain ‘Hold’ on TCS in the near term on relative expensive valuations to Infosys,” Antique Stock Broking said while adding that it has increased the target price to Rs 3,500 from Rs 3,400.

The company’s rivals Infosys and Wipro will announce their March quarter and FY21 numbers on April 14 and April 15, respectively.