Mumbai: IT bellwether Tata Consultancy Services (TCS) on Monday became the first Indian IT firm to hit the $100 billion market capitalisation mark as the stock extended its rally for the third consecutive session after reporting a better than expected numbers for the quarter ended March 2018.
While it is the second Indian company to hit $100 billion m-cap after Reliance Industries Ltd (RIL), which achieved the milestone way back in 2007, TCS’ m-cap in domestic currency terms is the highest ever by an Indian company.
The company’s m-cap zoomed to a record high of Rs 6.81 lakh crore in the intra-day trade after the stock hit an all-time high of Rs 3,557. The stock finally ended the day at Rs 3,415 with an m-cap of Rs 6.53 lakh crore followed by RIL (Rs 5.92 lakh crore) and HDFC Bank (Rs 5.06 lakh crore).
India’s leading software exporter also pipped its rival — US-listed Accenture, which commanded a market value of $98 billion.
After its third quarter results, several domestic as well as foreign brokerages have issued either ‘hold’ or ‘buy’ rating on the stock with many of them seeing limited scope for any major downside from the current levels.
“With robust deal wins and green-shoots in BFSI, there is definite possibility of double-digit revenue growth. With growth acceleration, scale up in digital and support from currency, margins are ready for uptick as well, implying return of double-digit revenue/earnings growth after 3 years,” said analysts at Edelweiss.
According to them, large Indian IT firms are entering a V-shaped earnings recovery phase enabled by huge digital-led demand, potential margin improvement as digital gains scale and currency tailwind and consistent buy back, akin to Accenture & Cognizant, which will lead to massive outperformance in earnings per share (EPS).
Meanwhile, markets ended with mild gains on Monday after yet another choppy session as investors kept their faith in consumption stocks amid an encouraging start to the earnings season.
The BSE Sensex rose 35 points to close at an over two-month high of 34,450.77, while the broader NSE Nifty finished at 10,584.70, up 20.65 points.
