Tata Consultancy Services Ltd (TCS) rallied over 5 per cent to hit its lifetime high of Rs 1756 in mid-morning trade on Friday, after the India’s largest software services company beat analysts’ expectations with sales expansion of 4.1% in the first quarter of 2013-14.
At 11:40 a.m.; TCS was trading 5.6 per cent higher at Rs 1756.00. It hit a low of Rs 1700 and a lifetime high of Rs 1756 in trade today.
The Mumbai-based company clocked sales of $3.2 billion (Rs 17,987 crore) while profits grew by about 0.7% to $668 million (Rs 3,796 crore).
TCS’s EBITDA and EBIT margin moved up by 29 bps and 50 bps Q-o-Q to 28.6% and 27.0%, even when the company had wage hike headwind during the quarter which is commendable.
TCS closed 10 large deals during 1QFY2014. These deals span industry segments as well as geographies. In addition, the company added two new clients in $100mn+ revenue bracket. The management sound confident of growing higher than the industry.
“Management indicated that they expect CY2013 to be better than CY2012 in terms of IT spending and the company has maintained hiring target of 45,000 gross employees for FY2014 which is encouraging,” Ankita Somani, Research Analyst-IT & Telecom at Angel Broking.
“Healthy set of results by TCS shrug off any concerns regarding health of the Indian IT industry which were raised due to weak performance by global players like Accenture and Oracle, she added.
Somani remains positive on TCS which has been a consistent performer but owing to recent sharp run up in the stock price, he maintains a ‘Neutral’ rating on the stock.
According to analysts, the medium and long term trend of TCS is visibly bullish; however, pullback in the short term cannot be ruled out.
“For most part of last 4 months TCS moved in a contracting sideways range and broke out of the continuation triangle thus formed with a sharp rally in the last 2 weeks,” said Tarun Dang, Managing Partner at Trend-Wise.
“Often price tends to pullback after a pattern breakout but then these dips offer attractive opportunities to participate in the dominant trend,” added Dang. (Source:ET)
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