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TCS share hits record high ahead of Q2 earnings; here's what to expect

TCS share hits record high ahead of Q2 earnings; here's what to expect

The IT share hit a record high of Rs 3,990, rising 2.5% against previous close of Rs 3,892.6 on BSE

Tata Consultancy Services stock clocked a fresh all-time high ahead of the firm's Q2 earnings set to be announced today. The IT share hit a record high of Rs 3,990, rising 2.5% against previous close of Rs 3,892.6 on BSE.

The stock has gained 4.19% in the last 2 days.

TCS share is trading higher than 5 day, 20 day, 50 day, 100 day and 200 day moving averages.

The IT share has gained 40.54% in one year and risen 38.31% since the beginning of this year. In a week, the share has rallied 6.45%.

Total 0.66 lakh shares of the firm changed hands amounting to turnover of Rs 26.29 crore.

Market cap of the firm rose to Rs 14.58 lakh crore on BSE.

Meanwhile, BSE IT index was trading 1.78% or 635 points higher at 35,740 in afternoon trade.

Kotak Institutional Equities in a note said, "We expect strong constant currency revenue growth rate of 5.3 percent powered by strong spends on digital and short-cycle programmes, conversion of strong bookings of the earlier quarter into revenues, and recovery in India after a sharp contraction of 14.1 percent in the June 2021 quarter."

The brokerage expects a growth of 4.7 percent in international markets and 15 percent in India business.

"We expect $8 billion of total contract value (TCV) powered by mid-sized deals. We do not expect any skew in TCV from mega-deals. TCV of deals will decline on YoY comparison even as previous year number was skewed by Phoenix mega-deal of $2.5 billion," said Kotak.

TCS is likely to report sales of Rs 48,091 crore in Q2, posting a 19.8% rise on a year on year basis, according to Anand Rathi Research.

 EBITDA is expected to climb 22.2% on an year on year basis to  Rs 14,063.5 crore. Net income may see a 36.7% rise to Rs 10,260 crore for the quarter ended September, Anand Rathi said in a report.

In Q1 of the current fiscal, TCS reported a 28.5 per cent rise net profit at Rs 9,008 crore compared to Rs 7,008 crore profit in the corresponding period last year. However, TCS' net profit on QoQ basis, however, declined 2.6 per cent.

The software major called out the domestic business as a drag which restricted its overall growth because of the second wave of COVID-19.

TCS' consolidated revenue from operations rose 18.5 per cent to Rs 45,411 crore. Revenue in dollar terms stood at $6.154 billion, while total contract value stood at $8.1 billion.

TCS' operating margin dropped primarily due to a salary hike announced in the previous quarter whose full impact was seen in Q1 FY22.

TCS board has declared an interim dividend of Rs 7 per equity share of Re 1 each.