Stock Views on TCS, United Spirits, Bharti Airtel

IDFC-SSKI Securities on TCS

Broking house IDFC-SSKI Securities has rated TCS as an ‘outperformer’ with a price target of Rs 630. “TCS is expected to be a key beneficiary of the accelerating trend in offshoring as clients lever-age low-cost geographies to contain IT services spend. TCS has, in the last few years, increasingly derisked its business model by expanding into newer geographies (Continental Europe, China and Latin America) as well as through long-term contracts,” the IDFC-SSKI note to clients said. “TCS derives approximately 30% of its revenues from non-US and non-UK geographies. We expect 8% revenue (US dollar) compounded annual growth and 4% EPS CAGR for TCS over FY09-11,” the note added.

Citigroup Global Markets on United Spirits

Citigroup Global Markets has reaffirmed its ‘sell’ rating on United Spirits, with a price target of Rs 454. “The recent sharp deterioration in profitability and the sequential volatility in operating profits have highlighted that USL’s business is far more cyclical than earlier envisaged. Around 90% of the promoter stake being pledged remains an overhang and a significant concern,” the Citi note to clients said. “Stake sale in USL would be a positive, though the timing and the pricing remain uncertain,” it added.

HSBC Securities on Bharti Airtel

HSBC Securities (India) has retained its ‘overweight’rating on Bharti Airtel with a price target of Rs 786. “The current market favours companies with strong balance sheets, low leverage, large scale, and high RoE (return on equity). What’s more, after the Satyam issue, companies with records of strong corporate governance command a premium,” the HSBC note to clients said. “Bharti is in a stronger financial position than its peers,” the note added.