TCS market capitalisation touches all-time high of Rs 12 trillion

Investment in the TCS market (m-cap) on Thursday topped the Rs 12-trillion-mark for the first time.

Shares of Tata’s party closed with a record high of Rs 3,250.15, an increase of 2.9 percent, valued by the company at Rs 12.02 trillion.

TCS is the second most important company in India after Reliance Industries (RIL), with a m-cap of almost Rs 12.9 trillion (including m-cap of low-paid shares).

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The IT services company is holding a strong return in Q2, and the growth momentum has continued in Q3 as the firm beats traffic limits on all key parameters such as revenue, limit and profit.

Investors congratulate the stock after it showed a return to the two-digit growth trend in the next financial year, after a road made with large contracts and a strong order pipeline. It last achieved a two-digit annual growth rate (YoY) in June 2019.

YoY growth of 7.2 per cent of TCS in total profits to Rs 8,701 crore came to Q3, which is periodically weak in Indian IT companies. Growth in all the important parts and geographies helped the company get the result. TCS said this has been its best Q3 performance in nine years.

Operating interest rates for the December quarter stood at 26.6 percent – a 160 percent increase in YoY, and exceeded market expectations.

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Commercial businesses reviewed TCS profit margin, after the third quarter.

CLSA increased its FY22 and FY23 estimates per share (EPS) by 4 and 2 percent, respectively, with a target price of Rs 3,070 to Rs 3,200, keeping the ‘presform rate’ ‘.

Emkay Global increased its FY21, FY22 and FY23 ratings by 2.8 percent, 4 percent and 4.6 percent, respectively, including the Q3 beat.

they believe TCS is ready to benefit from accelerated cloud acquisition and digital transformation opportunities, given its end-to-end potential. Still, the prices are rich. Keep ‘catch’, at a set price of Rs1,150 (previously Rs 3,000) at a cost of 26x FY23E, “said Emkay Global in its review.

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The feeling towards Indian IT stocks has improved, as companies have benefited from service delivery, the development of digital transformation by customers, and the successful winning of the agreement.

Other brokerages have also raised prices targeted. The target number of 39 analysts, tested by Bloomberg, following the announcement of results, now stands at Rs 3,320 per share.

TCS and RIL have long been playing cat-and-mouse, in search of a top position for the most important company in India (see chart).

However, between April and October 2020, the RIL shares were acquired after the appointment of a successful company – the largest of its Indian companies – in which it sold the stocks on its digital (Jio) and trading platforms, and issued shares on the issue of rights ( Rs 53,000 crore) to shareholders, totaling more than Rs 2 trillion.

While stock trading helped investors reach market-driven market estimates, the uncertain growth environment due to the epidemic saw an increase in demand for shares such as the RIL, which are seen as safe havens.

As of October, by reducing uncertainty about economic growth and revenue, the RIL has been underperforming, while TCS has benefited from an improved business outlook.

As a result, the gap between the two has narrowed. TCS is now around Rs 85,800 crore behind RIL in market value.