TCS shares hit Rs 4,000-mark, scale new 52-week high; Here's why

Shares of Tata Consultancy Services Ltd (TCS) extended its gains to hit a new 52-week high on Monday after the company inked a new deal in Paris to transform Europ Assistance’s IT operating model using artificial intelligence and machine learning. The company informed about the same through an exchange filing during the session.

TCS has been selected as a strategic partner by Europ Assistance to help reimagine its global IT operating model for enhanced resilience, scalability and user experience, said the company's filing. "TCS will step up its delivery centers in Europe and across geographies to provide end-to-end enterprise IT application services to Europ Assistance," it said.

Following the announcement, shares of TCS rose 1.35 per cent on Monday to hit new 52-week high at Rs 4,020 apeice, commanding a total market capitalization of more than Rs 14.70 lakh crore. The IT major scaled Rs 4,000 mark for the first times as it had settled at Rs 3966.35 in the previous trading session on Friday.

Europ Assistance is aa leading global assistance and travel insurance company, which supports about 300 million customers in over 200 countries and territories with travel, mobility, home and family, health, and concierge services.

New deal will see Tata Consultancy Services provide end-to-end enterprise IT application services, leveraging its delivery centers in Europe and across all geographies where Europ Assistance operates. The AI platform of TCS named 'ignio AIOps' will be used to transform Europ Assistance’s IT operations, enhancing resilience, scalability and agility, it added.

Brokerage firms were largely positive on the stock after its Q3 results. "TCS reported better than expected Q3FY24 results. We believe macro situations and client spending on discretionary would take more 1-2 quarters of recovery," said Religare Broking.

However, from a long term perspective we remain bullish on TCS given its strong product portfolio, healthy order book, investment towards technology as well as its focus on continuous improvement in margins makes it one of the top picks in the sector, it said maintaining 'buy' rating on the stock with the revised target price to Rs 4,359.

Deal intake moderated a bit sequentially, albeit remaining healthy with TCV of US $8.1 billion; book-to-bill stood at 1.1 times. Deal wins were broad-based and dominated by cost optimization programs, said Bonanza Portfolio. "We maintain Hold on TCS and increase our price target to Rs 4,000," it said.

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