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NEW DELHI: Shares of TCS rose over 3 per cent on Monday morning on better-than-expected fourth quarter earnings.
The scrip rose over 3 per cent to hit a high of Rs 2085.60.
Later, the scrip was hovering at Rs 2053.25, up 1.96 per cent at 09:38 am.
This was against 0.08 per cent rise in the BSE Sensex.
Strong growth in revenue from banking and financial services boosted TCS’ performance, which helped the company post its best show in 15 quarters.
Profits grew 17.7 per cent to Rs 8,126 crore in the fourth quarter on revenues of Rs 38,010 crore, which expanded 18.5 per cent.
Operating profit margin came in at 25.1 per cent, down 31 basis points on a year-on-year basis.
The IT major announced Rs 18 final dividend for FY19.
Analysts largely maintained their ratings and target price on TCS.
Edelweiss said the company has the best digital and execution capabilities and despite its size, the company will report industry-leading growth.
However, the stock trades at a rich valuation of 21.4 times FY20 estimated EPS, a significant premium to large-cap peers.
“The current share price factors in the underlying sector tailwinds,” said Edelweiss.
Emkay also expects the company to maintain its financial outperformance among tier-I IT companies.
“Double-digit growth, higher quality of the incremental business, and best-in-class execution capabilities have helped us expand our operating margin year on year.
Our foresight in investing very early on in building digital skills and transformational capabilities has not only gained us market share, but has also resulted in our very resilient, industry-leading margin Today,” said V Ramakrishnan, Chief Financial Officer said.
Earlier in the day, the stock opened at Rs 2071 on BSE against its previous closing of Rs 2013.75.
