TCS could gain ahead of Q2 earnings announcement: analysts

Could see further gains of 3-4% post announcement

Tata Consultancy Services (TCS), the global software arm of the Tata Group, could see its stock price move up by about 1% on Tuesday, ahead of its September-quarter result announcements. Analysts said that a gain of 1-1.5% in the stock prior to the announcement was not much as most of the optimism surrounding its earnings numbers had already been factored in.

“There is no doubt that TCS will beat Street expectations. There is a lot of positions that are being built into the stock and we could see some more upmove post the results announcement,” said Sudip Bandyopadhyay, managing director and CEO of Destimoney Securities.

The better-than-expected numbers posted by Infosys has further boosted the positive sentiment surrounding the sector and its companies.

Technical analysts said that post the results, the stock of TCS could move up by as much as 3-4%. Last week, the market-cap of TCS crossed the Rs 4-lakh crore mark, making it the most valued stock among the BSE Sensex stocks.

However, certain sections of the market believe that the stock is over-valued and should not be bought into at higher levels. Any surprise in the earnings numbers could see the stock swinging heavily in either direction, they added.

Most technology companies are expected to post good earnings growth in the September quarter largely owing to the rupee depreciation which began in June this year. While the BSE IT index has risen by about 40% since June this year, the stock price of TCS has gained over 45% during the same period.