IT consultancy company Tata Consultancy Services Ltd (TCS) became the second Indian company to hit Rs. 12 lakh crores in market cap. The first company to hit such a huge figure was Reliance Industries. In July 2020, Reliance Industries (RIL) market cap crossed Rs. 12 lakh crore figure when their shares crossed Rs. 1,900 mark on the Bombay Stock Exchange. Currently, RIL’s market cap is Rs. 12.29 lakh crores.
Earlier TCS’s stock rose 3.12% achieving a record high of Rs. 3,224 on the Bombay Stock Exchange. Thanks to the rise, the IT company’s market cap grew from 11, 70, 875 crores to Rs. 12.07 crores.
Investment giant JP Morgan stated that the December quarter growth was the fastest third quarter of TCS in 9 years. With this, JP Morgan has updated the revenue estimate of TCS by another 1% for the financial year 2021 and 2% for the next two financial years.
On the other hand, Goldman Sachs too increased the earnings estimates of TCS for the financial year 21-23 by 4% and 7%. According to Goldman Sachs, TCS will be one of the biggest beneficiaries of the current IT outsourcing wave given the scale at which TCS operates, the breadth of the client base it possesses, and the large pool of employees it has employed.
Phillip Capital, a brokerage firm said that it believes TCS to be one company that can emerge stronger out of the covid crisis and bouncing back even stronger in the financial year 22. “Valuations (at 26x FY23 PE) might appear expensive (relatively) – but we expect TCS to continue to command valuation premium to its peers, on the back of its strong diversified profile, superior return profile (ROE of 38 per cent), management stability and market leadership position.” Phillip Capital said.
TCS CEO Gopinathan in an interview with Nikunj Dalmia said, “Believe what we are witnessing is fairly long cycle technology upgrade opportunity, most important aspect it is at multiple levels, whether it is from a technological perspective, operating model perspective and even more importantly from customer biz transformation positioning perspective.”
Speaking about the future growth of the consultancy giant, Gopinathan said, “There is absolutely no doubt that TCS is going for double-digit growth (even beyond Fy22), rest of the stakeholders will have to take bets, you can bet on us or bet against us but we are going for it.”
On Friday, TCS’s profit rose to 7.8% year on year to Rs. 8,701 crores in the December quarter. The corresponding quarter last year saw TCS’s year on year profit to be Rs. 8, 118 crores. Revenues of TCS for the quarter rose to 5.42% year on year to Rs. 42, 015 crores compared to the Rs. 39, 854 crores in the same quarter in the last year.
