TCS surges 7.3%, becomes second Indian company to touch Rs 10 lakh crore m-cap
The optimism around TCS rubbed off on other software exporting majors Infosys and Wipro, whose shares rose 3 per cent and 6.73 per cent, respectively, to hit all-time highs.
Investec said the September quarter would be a quarter of supply side issues normalising for most companies.
Mumbai: Tata Consultancy Services (TCS) spearheaded the rally in technology stocks on Monday after the country’s largest software services exporter announced plans of a share buyback. The stock jumped 7.3 per cent to an all-time high of Rs 2,706.85, helping the company touch Rs 10 lakh crore in market value — only the second Indian firm to reach the milestone after Reliance Industries.
The optimism around TCS rubbed off on other software exporting majors Infosys and Wipro, whose shares rose 3 per cent and 6.73 per cent, respectively, to hit all-time highs. The IT index soared 4 per cent — the best performing sector index. Analysts said expectations of strong earnings in the September quarter in addition to the TCS’ buyback announcement contributed to the run-up in the shares.
“There is speculative build-up in IT stocks because the market expects their numbers to be strong. TCS announced a buyback so the Street assumed that profits will be strong for the company as well as the sector,” said Sanjiv Bhasin, director, IIFL Securities. “Besides, Wipro and Tech Mahindra have seen technical breakouts,” added Bhasin.
TCS will announce earnings for the quarter ended September on Wednesday followed by Infosys on October 14 and HCL Technologies on October 16. Tech Mahindra will announce quarterly results on October 23. “TCS’ buyback announcement has pushed the stock higher than the others and others gained on expectation of good numbers," said Neerav Dalal, research analyst at Maybank Kim Eng Sec. “Wipro could probably announce a buyback as the cooling period following the last buyback has been completed," said Dalal, who is currently most bullish on Infosys, HCL Tech, Tech Mahindra and Mphasis. Technology shares have been the best performers in the past six months as the sector has shown resilience compared to most others in challenging economic conditions, The IT index is up 75 per cent from March 24, while Sensex is up 46 per cent.
Investec said the September quarter would be a quarter of supply side issues normalising for most companies.
