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Tata Consultancy Services Shares Hit Record High After Strong Q1 Earnings

Tata Consultancy Services (TCS) posted a record net profit in June quarter driven by growth in banking, financial services and insurance units.

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Tata Consultancy Services Shares Hit Record High After Strong Q1 Earnings

TCS share price today: Shares in Tata Consultancy Services hit a record high on Wednesday

TCS or Tata Consultancy Services shares jumped more than 6 per cent to hit a record high on Wednesday with large volumes, a day after the IT major posted strong quarterly earnings. Shares in TCS, the country's largest IT services exporter, closed 5.5 per cent higher at Rs 1,979.60. TCS shares rose to as much as Rs 1,995 on the BSE during the session. More than 11.5 lakh Tata Consultancy Services shares changed hands on the BSE (Bombay Stock Exchange), as against a two-week average of 2.6 lakh.

TCS, the country's largest IT company, had reported a 24 per cent year-on-year surge in net profit to a record Rs 7,340 crore for the April-June quarter, beating Street estimates. Analysts had on an average expected TCS to post a net profit of Rs. 6,983 crore, according to Thomson Reuters data. TCS reported a revenue of Rs. 34,261 crore registering an annual (year-on-year) growth of 15.8 per cent. In the previous quarter, TCS had reported a net profit of Rs. 6,904 crore over net income from operations of Rs. 32,075 crore.

Analysts say that although the company's Q1 performance was stronger than anticipated.

AK Prabhakar, head of research at IDBI Capital, recommends TCS shares strictly from a long-term perspective. "TCS results were better than expectations... We have increased the target price post-earnings to Rs 2,042 on valuations," he said. However, he sees limited upside in the stock. At the revised target price, the shares will become "a bit expensive", he adds.

Brokerage HDFC Securities upgraded TCS shares from 'neutral' to 'buy' with a target price of Rs 2,130. It expects Tata Consultancy Services' growth trajectory to remain strong and margin expected to trend towards the target band as currency tailwinds persist.

TCS shares were among the top gainers on key indices Sensex and Nifty.

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