TCS gains 3%, hits 52-week high in range-bound market

TCS continues to witness robust demand for cloud migration, digital engineering, product innovation, and enterprise application solutions, according to analysts

Shares of Tata Consultancy Services (TCS) hit a 52-week high of Rs 3,578, up 3 per cent on the BSE in Tuesday's intra-day trade, in an otherwise range-bound S&P BSE Sensex. The S&P BSE Midcap and Smallcap index, meanwhile, were down 3 per cent at 02:13 PM.

The stock of Tata Group information technology firm surpassed its previous high of Rs 3,575 touched on February 16, 2023. It had hit a record high of Rs 4,043 on January 17, 2022.

In the past two trading days, TCS has gained 4 per cent after the company partnered with Dassault Systems through its Living Heart Project that unites an ecosystem of cardiovascular researchers, educators, medical device developers, regulatory agencies including US FDA, and practicing cardiologists to develop and validate realistic digital simulations of the human heart.

"As an industry partner, TCS will use its domain and technology expertise, and its research on the Digital BioTwin of the heart to contribute to model refinement, simulation, and technological implementation in developing, and validating highly accurate, personalised digital human heart models," the company said in statement.

Also Read: TCS helps AIB Life launch operations in Ireland with tech platform
Meanwhile, for the April-June quarter (Q1FY24), TCS registered a Total Contract Value (TCV) of $10.2 billion, marking another consecutive quarter with a TCV of $10 billion. TCS continues to witness robust demand for cloud migration, digital engineering, product innovation, and enterprise application solutions, which have contributed to the increased deal wins in these segments.

"There has been strong interest across the industry to engage with TCS, and explore opportunities in Generative AI and Machine Learning. The management believes that TCS is well positioned to benefit from the long-term demand in these areas, driven by its early investment in Gen AI and Machine Learning. Despite the short-term uncertainty, the company remains optimistic about its long-term growth," analyst at KRChoksey Shares and Securities said.

It further added that despite the persistent global macro uncertainties, TCS is well positioned with its size, steadfast market leadership position, best-in-asset class execution and order book (especially exposure to longer duration contracts) to deliver industry-leading growth/margin and demonstrate superior return ratios.

In Q1FY24, TCS delivered a resilient performance despite the unprecedented macroeconomic conditions.

"Revenue growth may remain subdued in the near term, owing to delays in discretionary and non-critical projects. However, healthy orderbook, strong execution capabilities, sustained focus on digitalisation and cost optimisation augur well for the company’s long-term performance. There is higher demand across verticals in exploring generative AI for productivity enhancement, content creation, and customer interaction," analysts at Geojit Financial Services said.