Another Milestone For TCS As It Celebrates 50 Years: Rs 7 Lakh Crore
The market value of Tata Consultancy Services (TCS) today hit a new milestone of Rs 7 lakh crore after its share price rallied to a fresh 52-week high. TCS shares gained as much as 2 per cent today to Rs 3,674, rising for a second straight day. TCS share price had jumped over 3 per cent on Thursday as the recent bout of weakness in the rupee lifted IT shares. Mumbai-based TCS, which is celebrating 50 years of being in business, is a unit of Tata Group, one of India's oldest companies that now sells cars, power, tea and chemicals through its various subsidiaries.
- Last month, TCS made history when its market value hit $100 billion
- It was the first Indian IT company to hit the milestone
- Optimism over global IT spending, weaker rupee has boosted IT stocks
Last month, India's biggest IT company TCS made history when its market value hit the $100 billion mark, becoming the first Indian IT company to hit the milestone. Energy-to-telecom conglomerate Reliance Industries, led by India's richest man Mukesh Ambani, had breached the $100 billion mark way back in 2007.
TCS shares have hugely outperformed the overall market in the past six months as IT stocks came back into favour with investors. Shares of TCS have risen over 35 per cent in the past six months as compared to a mere 3 per cent rise in Sensex.
Optimism over global IT spending, weakness in the rupee and record quarterly profit in the January-March period have boosted the sentiment in TCS shares, say analysts.
Last month after its earnings announcement, Tata Consultancy Services' management had said that it expects a rebound in spending by its key banking, financial services and insurance (BFSI) clients this financial year, helped by strong demand for technology related to security, blockchain and analytics.
A weaker rupee has also lifted IT stocks. The US is the biggest market for many large Indian companies and rupee depreciation lifts their earnings in rupee terms. So far this year, the rupee is down over 6 per cent against the US dollar. With the market factoring in that the rupee will stay at current levels going forward, this will be an advantage for it companies, said Sudheer Guntupalli, a technology sector analyst with Ambit Capital. "Market is also expecting an uptick in IT spending in key client verticals such as BFSI (banking, financial services and insurance), retail etc. after the recent US tax reform," said Mr Guntupalli.
Rahul Agarwal, director at Wealth Discovery, says the current slide in the rupee vis-a-vis the US dollar has been a "blessing in disguise for the Indian IT majors" as it makes Indian IT exports more competitive.
"It has been a shot in the arm for the country's information technology sector which has been battered in last two years by a broader slowdown in technology spending and issues such as the H-1B visa worries. Things are beginning to look up - especially after the recent quarterly earnings, which have shown positive momentum," he adds.