TCS market cap crosses Rs 7-trillion mark; stock hits new high of Rs 3,668

Tata Consultancy Services (TCS) , the country's biggest software services exporter, saw its market capitalisation (market-cap) cross Rs 7-trillion mark, adter the stock price of the company hit a new high of Rs 3,668 on the BSE in early morning trade.

At 09:19 am; TCS was trading 1.7% higher at Rs 3,666 have market-cap of Rs 7.91-trillion, the BSE data shows.

Since April 19, TCS has outperformed the market by surging 16% after the company’s board had recommended bonus issue in the ratio of 1 equity share of Re 1 each for every 1 equity shares of Re 1 each held by the shareholders of the company as on the record date. On comparison, the S&P BSE Sensex was up 0.74% during the same period.

The company has fixed Saturday, June 2, 2018 as the record date for determining the entitlement of members to receive bonus shares in the ratio of 1:1. The stock will turn ex-bonus on Thursday, May 31, 2018.

TCS had also reported a strong set of numbers in March 2018 quarter (Q4FY18) as well as for 2017-18 (FY18), backed by all-round growth in key verticals and geographies, and digital services and solutions. The company posted double-digit revenue growth in dollar terms in Q4 for the first time in the last 12 quarters. The management was confident of sustaining this growth rate in the coming quarters.

“With some of the smaller fast-growing verticals such as energy & utilities (4.4% of revenues), travel and hospitality (around 4% of revenues) and Life sciences and Healthcare (around 7% of revenues) set to sustain their comfortable double-digit % growth trajectory, TCS has a real possibility of hitting double-digit % constant currency revenue growth in FY19, not seen in FY17/18 and thus breaking out of the 7-8% Y/Y revenue growth trajectory (constant currency) that TCS seems to be stuck in for the past 6-7 quarters,” analysts at JP Morgan said in result update.

“TCS has guided for a better demand outlook for FY19 with bottoming out of US BFS clients and strong outlook for retail vertical. It may be noted that US BFS and retail were the two big drags on growth in FY18. With improvement in revenue growth from both these segments, we expect revenue growth acceleration in FY19. TCS has had good deal wins in 2HFY18,” analysts at Antique Stock Broking said in result review.

“The company has bagged large number of deals during the quarter which gives strong revenue visibility and sustainable growth going forward. We believe the turnaround for BFS and Retail segment on the back of deal wins would be a huge positive for the company,” analysts at KRChoksey Shares and Securities said in result update.

Going ahead, the brokerage firm believes the increase in revenue contribution from digital services coupled with strong traction for platforms and solution to augment its topline growth. The operating margin is sustainable at this level supported by contribution from digital services and platforms, which are margin accretive, it added.