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Informist, Friday, Oct. 10, 2025                                      Tel +91 (22) 6985-4000

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Equity Alert: Brokerages await more clarity on TCS foray into data centre

 

MUMBAI--1025 IST--Brokerages are not excited about Tata Consultancy Services' foray into data centre business just yet and await more details about the same. Brokerages have not yet incorporated revenues from data centres in their estimates for now.

 

TCS on Thursday announced it will build an artificial intelligence data center in India with a capacity of 1 gigawatt. "Regarding the data center announcement, we await clarity on the capital structure, capex schedule, and other details such as potential rentals and signed MOUs. At present, we do not model data center investments or related revenue into our forecasts," Motilal Oswal Financial Services in its report.

 

Some of the brokerages were concerned that the return on equity of the data centre is likely to be lower than its core business. "It is unclear to us how the ROEs of this business will be similar to existing business RoE of 50% given it is capex-heavy nature with IRRs at 20%," Nomura said. Nuvama Institutional Equities acknowledged the return on capital employed of the data centre business will be lower than the core business.   

 

Most brokerages have made positive comments on the company's foray into data centre. "While this might not appear to be the best avenue to deploy capital, we view the decision as a balanced one, as it explores growth opportunities in the tech-ecosystem...," Nuvama said.

 

Speaking on similar lines, brokerage JM Financial said, "TCS' willingness to put its balance sheet to use, a significant deviation from its earlier conservative approach, is a welcome change in the current dynamic environment."

 

The equity market was muted to the data centre announcement by Tata Consultancy Services. At 1025 IST, shares of the company were slightly down at INR 3,051 per share.  (Anshul Choudhary)

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Equity Alert: Natco Pharma rises; HC allows co to launch risdiplam drug

 

 

MUMBAI--1016 IST--Shares of Natco Pharma rose 6.3% Friday to an intraday high of INR 864.80. Delhi High Court Thursday allowed Natco Pharma to launch a generic version of the drug risdiplam in India. The court denied F. Hoffmann-La Roche AG's plea for an injunction against the company for the drug. At 1012 IST, shares of the company were 3.6% higher at INR 843.15. The stock was among the top Nifty 500 gainers in the early trade but later came off highs.

 

The court removed its status quo order issued earlier, wherein it had asked Natco Pharma not to launch the drug until its final ruling in the matter. Risdiplam is an oral prescription medicine used in the treatment of spinal muscular atrophy in patients two months of age or older.

 

In an exchange filing, Natco Pharma had said it had decided to launch the product with immediate effect. Natco Pharma said it also intends to offer some discount to certain deserving patients through its patient access programme.

 

The stock was up for the second session and has risen nearly 7% over that period. So far Friday, 2.64 million shares of the company changed hands on the NSE, higher than 163,136 shares traded during the same period on Thursday. Of the six brokerage reports on the stock available with Informist, two have a 'buy' or equivalent rating, three have a 'hold' or equivalent rating, and one has a 'sell' rating. The 'buy' recommendations have an average target price of INR 1,211.  (Simran Rede)

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Equity Alert: Indices rise after a brief fall at open, TCS down 1%

 

 

MUMBAI--0927 IST--Benchmark indices rose after opening marginally lower, backed by gains in some financial services and oil and gas stocks. Oil and Natural Gas Corp. rose over 1% and was the top gainer in the Nifty 50 index, followed by State Bank of India and Power Grid Corp. of India, which were up around 1%.

 

Tata Consultancy Services fell nearly 1%, among the biggest losers on the 50-stock index, after the company reported a lower-than-expected consolidated net profit for the September quarter. Tata Steel and JSW Steel were down over 1?ch. At 0935 IST, the Nifty 50 index was up 0.3% at 25251.45 points and the BSE Sensex index rose 0.3% to 82416.70 points. 

 

Among Nifty 500 stocks, Natco Pharma rose nearly 6% and was the biggest gainer. A division bench of the Delhi High Court has allowed the company to launch the drug Risdiplan in India, after quashing F. Hoffmann-La Roche AG's injunction plea. Whirlpool of India and Redington gained over 3% and were among the top gainers in the index. Hindustan Copper and Graphite India fell 3-4?ch.

 

All broader market indices traded with gains, with Nifty Smallcap 50 leading the pack, up 0.4%. Nifty Smallcap 100 and Nifty Smallcap 250 rose 0.3?ch. Most sectoral indices were also in positive territory. Nifty Realty, Nifty PSU Bank, and Nifty Consumer Durables indices rose nearly 1?ch. Nifty Metal and Nifty IT were the only sectoral indices in the red, down nearly 1%. Nifty Healthcare hovered between gains and losses. (P. Madhu Kumar)

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Equity Alert: Analysts cut TCS FY26 EPS estimates on cautious demand outlook

 

MUMBAI--0830 IST--At least four brokerages have cut their earnings per share estimates for Tata Consultancy Services for 2025-26 (Apr-Mar) by 0.5-2?ter the company's September quarter earnings. TCS' revenue growth in the September quarter was slightly better than estimates but brokerages were cautious about the growth outlook. However, they either made only small cuts in their target prices or kept these unchanged owing to the attractive valuation of the stock.

 

"We have revised our USD revenue CAGR estimate for FY25–27E downward from 4.6% to 2.7%, factoring in near-term softness and a cautious demand outlook," Systematix Shares and Stocks said in a report. It also cut the target price for TCS by over 3% to INR 3,733 per share. On Thursday, shares of TCS closed at INR 3,061.70 on the National Stock Exchange.

 

Brokerages were cautious about the uncertainty in demand trends in the near term, which led Nuvama Institutional Equities to cut the FY26 and FY27 earnings per estimates by 2?ch – the steepest cut among the four brokerages for the respective years. The brokerage also reduced its target price for TCS by 7.6% to INR 3,650.

 

"We remain cautious in the light of the global economic uncertainty and believe that discretionary spending will be dry for FY26," Nirmal Bang Institutional Equties said in its report. While brokerages were uncertain about the near term, some of them were more confident about the longer term. Brokerage Emkay Global Financial Services and Systematix raised its earnings per share estimate for FY27 by 0.6-1.1%.

 

"The company's strong deal pipeline, strategic investments in AI/Gen AI, leadership in cloud and cybersecurity, and new entry into the data center business position it well for long-term growth," Nirmal Bang said. The brokerage upgraded the stock to 'buy' while raising the target price marginally to INR 3,861.

 

Brokerages were also positive on the stock in the long term due to its attractive valuation. Systematix said the stock was trading at a 10% discount to its 10-year average one-year forward earnings multiple and offers a "favourable" entry point. (Anshul Choudhary)

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Equity Alert: Indices seen tad dn; Nuvama cuts TCS EPS view, target price

 

MUMBAI--0824 IST--Benchmark indices may open slightly lower Friday, tracking global markets. Indices in the US and Asia fell as the US government shutdown continued. Investors in the US booked some profits ahead of the September quarter corporate earnings and the weekend, according to media reports. Going ahead, the only key driver for the movement in the market will be Jul-Sept earnings, analysts said. 

 

Despite closing substantially above 25000 points Thursday, analysts say the Nifty 50 may trade slightly lower. At 0815 IST, the contract traded on the NSE International Exchange was 0.2% higher at 25262 points, around 80 points higher than the Nifty 50's spot level. Thursday, the Nifty 50 closed at 25181.80 points, up 135.65 points or 0.5% and BSE Sensex ended at 82172.10 points, up 398.44 points or 0.5%. 

 

Following the September quarter earnings of TCS, Nuvama Institutional Equities cut the earnings per share estimate of the company by 2% for FY26 and FY27 each due to a tad lower growth. Systematix Institutional Research reduced the revenue compound annual growth rate estimate for FY25-FY27 to 2.7% from 4.6%.

 

Going forward, the earnings along with commentaries from management are likely to set the tone for Indian equities, a head of research at a domestic brokerage said. However, the market may see some profit-taking but the probability remains low, and it will happen only below 24900 levels, said Vipin Kumar, assistant vice-president of derivatives and technical at Globe Capital Market.  (Simran Rede)

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Equity Alert: Most indices in Asia fall; gains in chip cos push Kospi higher 

 

MUMBAI--0810 IST--Most benchmark equity indices in Asia were down in early trade Friday, tracking overnight losses in the US market. However, shares of South Korean chipmakers SK Hynix and Samsung Electronics hit all-time highs, taking positive cues from a series of artificial intelligence-related deals in the US. Indices in Japan were down and the Nikkei 225 index retreated from the previous session's record closing high after the country's wholesale inflation print for September held steady, adding pressure on the Bank of Japan to raise interest rates.

 

Japan's Nikkei 225 day index was nearly 1% lower. The country's wholesale prices rose 2.7% on year in September, higher than the market estimate of 2.5%. This is a sign of persistent cost pressure that will keep markets braced for a possible rate hike by the country's central bank when it meets on Oct. 30, Reuters reported. "The market expects the Japanese government to adopt expansionary fiscal policies... however, considerable uncertainty remains about the specifics of the policies up for debate, as well as the extent of the fiscal expansion," analysts from Bank of America were quoted by Reuters, as saying.

 

South Korea's markets were higher in early trade and the Kospi gained more than 1?ter a near week-long holiday. Chip companies SK Hynix and Samsung Electronics rose 10% and 6%, respectively, to their record highs, CNBC reported. The two companies are set to benefit from a deal between OpenAI and Advanced Micro Devices deal that could see the former take a 10% stake in Advanced Micro Devices.

 

China's CSI 300 fell 0.6%, following declines in exchange traded funds tracking large-caps on Wall Street overnight after Beijing expanded its rare earths export controls on Thursday. "This helps with increasing leverage for Beijing ahead of the anticipated Trump-Xi summit in (South) Korea later this month," Tim Zhang, founder of Edge Research, was quoted by Reuters, as saying. 

 

Following were the levels of key Asian indices at 0810 IST:

 

Index	Level	Change in %
CSI 300 Index	4680.00	(-)0.63
Hang Seng Index	26529.61	(-)0.83
Nikkei 225 Day	48101.46	(-)0.99
TOPIX FIRST SECTION	3204.41	(-)1.64
KOSPI	3589.83	1.14
FTSE Singapore Strait Times	4437.36	(-)0.07
S&P/ASX 200 Index	8963.30	(-)0.07

 

(Eshitva Prakash)