TCS posts 1st ever full-year profit drop in 14 years since IPO, but shares jump 6% on robust Q4 results

India’s largest IT services company Tata Consultancy Services (TCS) posted its first-ever drop in the full year net profit on Thursday in a span of last 14 years since the firm got listed on Indian exchanges in 2004. But the shares of the market capitalisation leader TCS went on a joy ride on Friday to hit a record high level. The appreciation in the share price of TCS can be attributed to the better-than-expected fourth-quarter (Q4) results, a dividend of Rs 29 per equity share, bonus issue in the ratio of 1:1 coupled with the preferable projections for the upcoming quarters of FY19.

According to the data available with exchange filings and annual reports, the Tata Group’s cash cow TCS have perpetually reported a rise in the consolidated net profit for the last 14 years after listing. TCS’ first full-year net profit after listing stood at Rs 1,976.9 crore for the financial year ended 31 March 2005. Since then, the net profit of TCS had risen in the following years but a drop was seen in the full year consolidated net profit for the fiscal year ended 31 March 2018. Earlier yesterday, TCS reported a consolidated net profit of Rs 25,880 crore for FY18 as compared to a net profit of Rs 26,357 crore in the preceding fiscal (FY17).

Shares of Tata Consultancy Services Ltd jumped as high as 6.56% to an all-time high of Rs 3,399.9 on BSE while the stock advanced 6.54% to a lifetime peak of Rs 3,399.9 on NSE on Friday. Following a massive spike in the share price of the IT behemoth TCS, the company gained as much as Rs 40,056 crore in the market capitalisation after the Q4 results. As per the day’s high share price of Rs 3,399.9, TCS commands a market capitalisation of Rs 6,50,838.64 crore as against Rs 6,10,782.17 crore.

TCS got listed in August 2004 at a premium of about 26% from the issue price of Rs 900. Over the course of last 14 years of listing-history of TCS, the IT giant has announced bonus issue of equity shares three times including the latest one on yesterday. All the three bonus issue were announced in a ratio of 1:1. The first bonus was declared in 2006, second in 2009 and third in 2018.

TATA Consultancy Services ( TCS )