 "Switch to TCS from L&T on valuations: Credit Suisse")
Investors should switch to Tata Consultancy Services Ltd (TCS) from Larsen & Toubro Ltd (L&T) as valuations and fundamentals now favour the software services exporter over the engineering firm, Credit Suisse said in a note on Friday.
TCS shares surged 73% last year, compared with a flat performance by L&T. But roles have reversed this year, with the construction firm up 21% and the IT firm down 3.1%.
Credit Suisse estimates L&T is now trading at a 14% price-to-earnings premium to TCS, the highest since October 2010, even as consensus earnings estimate changes have been "insignificant."
The investment bank added that TCS also scores well on fundamentals such as leverage, earnings-per-share growth and cash generation.
You’ve reached your limit of {{free_limit}} free articles this month.
Subscribe now for unlimited access.
Already subscribed? Log in
Subscribe to read the full story →
Smart Quarterly
₹900
3 Months
₹300/Month
Smart Essential
₹2,700
1 Year
₹225/Month
Super Saver
₹3,900
2 Years
₹162/Month
Renews automatically, cancel anytime
Here’s what’s included in our digital subscription plans
Exclusive premium stories online
Over 30 premium stories daily, handpicked by our editors
Complimentary Access to The New York Times
News, Games, Cooking, Audio, Wirecutter & The Athletic
Business Standard Epaper
Digital replica of our daily newspaper — with options to read, save, and share
Curated Newsletters
Insights on markets, finance, politics, tech, and more delivered to your inbox
Market Analysis & Investment Insights
In-depth market analysis & insights with access to The Smart Investor
Archives
Repository of articles and publications dating back to 1997
Ad-free Reading
Uninterrupted reading experience with no advertisements
Seamless Access Across All Devices
Access Business Standard across devices — mobile, tablet, or PC, via web or app