Shares of the country's largest software services company, Tata Consultancy Services (TCS), rose as much as 3.32 per cent to hit record high of Rs 3,224 on the BSE after it reported stronger than expected December quarter earnings post market hours on Friday on the back of higher demand for its cloud services during the Covid-19 pandemic. TCS shares surged a whopping 33 per cent in calendar year 2020, outperforming the Nifty which rose 15 per cent.
TCS' net profit rose to Rs 8,701 Crore in the three months to December 31, 2020, from Rs 8,118 Crore a year earlier. Analysts on average had expected a profit of Rs 8,401 crore, according to Refinitiv data. Revenue from operations jumped 5.4 per cent to Rs 42,015 Crore.
The results kicked off India's corporate earnings season for the December quarter, a seasonally weak period for the software industry, but one which analysts reckon has been good for IT firms in 2020 because in part due to the Covid-19 crisis.
TCS and rivals, Infosys and Wipro, have been winning more large contracts from businesses that are investing in services such as cloud-computing and cybersecurity to support their shift to remote work.
"Growing demand for core transformation services ... have driven a powerful momentum that helped us overcome seasonal headwinds," TCS Chief Executive Officer Rajesh Gopinathan said in a statement to the stock exchanges.
TCS' revenue in terms of constant grew at 4.1 per cent sequentially.
The Mumbai-based company said revenue from the banking and finance industries, its top revenue contributor, jumped 7.6 per cent year-over-year to Rs 16,655 crore in the December quarter.
As of 11:00 am, TCS shares traded 2 per cent higher at Rs 3,183, outperforming the Nifty which was up 0.82 per cent.