 "TCS gains 5% in two days, stock at life-time high ahead of Q2 results")
Shares of Tata Consultancy Services hit a new high at Rs 3,990, up 2.5 per cent on the BSE in Friday’s intra-day trade, and has now gained 5 per cent in the last two trading sessions, ahead of its July-September quarter (Q2FY22) results. The information technology (IT) will announce last quarter results late in the evening today. The stock surpassed its previous high of Rs 3,981.55 touched on September 16, 2021.
The recent Accenture guidance suggests the demand environment for Indian IT companies continues to be strong. In our view, it is not a quarter phenomenon but there are some structural changes happening on the ground that may bring cheer for Indian IT companies in years to come, analyst at ICICI Securities said in IT sector report.
Covid-19 has made industries across the globe bring about changes to adapt to the Work from Home environment with minimal disruption to their business models. This also led businesses to change their model from captive to outsourcing, which is expected to benefit Indian IT companies. We do not rule out margin pressure on Indian IT companies in the near term but in the long term, strong revenue growth may help to tide over these costs, analyst said.
TCS is expected to continue its strong revenue traction for the quarter but margins are expected to be impacted due to lower utilisation and higher subcontracting costs. It is expected to register 3.5 per cent QoQ growth in constant currency led by improvement in demand from BFSI, healthcare and retail, acceleration in digital technologies and ramp up of deals and also recovery from India market, which declined 14 per cent QoQ in Q1, the brokerage firm said in Q2 result preview.
Meanwhile, most brokerages are pencilling in double-digit growth in net profit and revenue for TCS, led by improvement in demand from BFSI, healthcare and retail, acceleration in digital technologies and ramp-up of deals along with recovery from the India market. Furthermore, persistent market share loss of key players such as Capgemini and Cognizant is also expected to directly benefit TCS. CLICK HERE FOR BROKERAGES VIEW
The recent Accenture guidance suggests the demand environment for Indian IT companies continues to be strong. In our view, it is not a quarter phenomenon but there are some structural changes happening on the ground that may bring cheer for Indian IT companies in years to come, analyst at ICICI Securities said in IT sector report.
Covid-19 has made industries across the globe bring about changes to adapt to the Work from Home environment with minimal disruption to their business models. This also led businesses to change their model from captive to outsourcing, which is expected to benefit Indian IT companies. We do not rule out margin pressure on Indian IT companies in the near term but in the long term, strong revenue growth may help to tide over these costs, analyst said.
TCS is expected to continue its strong revenue traction for the quarter but margins are expected to be impacted due to lower utilisation and higher subcontracting costs. It is expected to register 3.5 per cent QoQ growth in constant currency led by improvement in demand from BFSI, healthcare and retail, acceleration in digital technologies and ramp up of deals and also recovery from India market, which declined 14 per cent QoQ in Q1, the brokerage firm said in Q2 result preview.
Meanwhile, most brokerages are pencilling in double-digit growth in net profit and revenue for TCS, led by improvement in demand from BFSI, healthcare and retail, acceleration in digital technologies and ramp-up of deals along with recovery from the India market. Furthermore, persistent market share loss of key players such as Capgemini and Cognizant is also expected to directly benefit TCS. CLICK HERE FOR BROKERAGES VIEW
One subscription. Two world-class reads.
Already subscribed? Log in
Subscribe to read the full story →*Subscribe to Business Standard digital and get complimentary access to The New York Times
Smart Quarterly
₹900
3 Months
₹300/Month
SAVE 25%
Smart Essential
₹2,700
1 Year
₹225/Month
SAVE 46%
*Complimentary New York Times access for the 2nd year will be given after 12 months
Super Saver
₹3,900
2 Years
₹162/Month
Subscribe
Renews automatically, cancel anytime
Here’s what’s included in our digital subscription plans
Exclusive premium stories online
Over 30 premium stories daily, handpicked by our editors
Complimentary Access to The New York Times
News, Games, Cooking, Audio, Wirecutter & The Athletic
Business Standard Epaper
Digital replica of our daily newspaper — with options to read, save, and share
Curated Newsletters
Insights on markets, finance, politics, tech, and more delivered to your inbox
Market Analysis & Investment Insights
In-depth market analysis & insights with access to The Smart Investor
Archives
Repository of articles and publications dating back to 1997
Ad-free Reading
Uninterrupted reading experience with no advertisements
Seamless Access Across All Devices
Access Business Standard across devices — mobile, tablet, or PC, via web or app
SAVE 25%