TCS rallies over 1% on multi-million euro deal from Scandinavian Airlines

NEW DELHI: Tata Consultancy Services Ltd surged over 1 per cent in a weak market on Wednesday, a day after the country's largest software services firm said it has bagged a five-year multi-million euro deal from SAS Scandinavian Airlines to help transform and optimise its IT infrastructure.

TCS will implement its propriety cloud-based solutions to simplify and standardise SAS IT landscape and the initiative is a part of the SAS' "4 Excellence Next Generation" strategy, aimed at improving competitiveness of the SAS Group, TCS said in a statement.

SAS Scandinavian Airlines is one of Northern Europe's major airline, with more than 1,100 daily departures to 136 destinations in Scandinavia, Europe, the US and Asia.

At 09:25 a.m.; TCS was trading 1.08 pr cent higher at Rs 2007.50. It has hit a low of Rs 1995 and a high of Rs 2025 in trade today. However, for the year 2013, the stock has rallied over 50 per cent.

Post its analysts' meet earlier this week, most brokerages maintained their bullish view on TCS at the sell-side analysts' briefing. They were of the view that TCS would deliver strong revenue growth in FY14 and benefit from the rupee's depreciation.

Morgan Stanley has maintained its overweight rating on the stock and raised its target price to Rs 2,285 from Rs 1,670 earlier. According to their report, the Street could be underestimating TCS' EPS for FY14-15e. It expects the company to continue with strong revenue growth in FY14.

Morgan Stanley has raised earnings forecast by 13-26 per cent for FY14e-15 due to due to better revenue growth and currency depreciation.

Credit Suisse is of the view that the company's strong revenue growth will continue. The currency factor will help margins significantly in the September quarter, it says. The brokerage expects the currency movement to margins by 275-350 bps.