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TCS share price hits all-time high on strong revenue growth in Q2

Share of TCS opened  3.2% higher at Rs 2825 against previous close of Rs 2737 on BSE

twitter-logoBusinessToday.In | October 8, 2020 | Updated 11:42 IST
TCS share price hits all-time high on strong revenue growth in Q2
TCS stock gained 5.03% intra day to hit all time high of Rs 2875 on BSE.

Tata Consultancy Services (TCS) share hit all-time high in early trade after the IT major reported a 6.66 per cent rise in consolidated profit in September quarter.  Profit rose to Rs 7,475 crore in Q2 against Rs 7,008 crore profit in June quarter of current fiscal.

However, India's largest software exporter reported a 7.05 per cent year-on-year decline in its consolidated net profit in the second quarter. Share of TCS opened  3.2% higher at Rs 2825 against previous close of Rs 2737 on BSE. The stock has risen 23.2% in the last 9 days.

The stock gained 5.03% intra day to hit all time high of Rs 2875 on BSE. TCS share trades higher than 5 day, 20 day, 50 day, 100 day and 200 day moving averages. The IT stock has gained 39.36% in one year and risen 32.27% since the beginning of this year.

TCS fires on all cylinders in September quarter, deal closures at $8.6 billion

Total 2.53 lakh shares of TCS changed hands amounting to turnover of Rs 72.21 crore on BSE. The stock hit 52-week low of Rs 1,504 on March 13 this year. Market cap of the firm rose to Rs 10.74 lakh crore on BSE. Revenue from operations rose 3% to Rs 40,135 crore in Q2 compared to Rs 38,977 crore in the year ago period.

On a sequential basis, revenue climbed 4.73 per cent from Rs 38,322 crore in the April-June quarter. On the operating front, consolidated earnings before interest and tax (EBIT) jumped 16.3 per cent QoQ to Rs 10,689 crore, while margin stood at 26.2 per cent during July-September quarter.

Jyoti Roy, DVP, Equity Strategist at Angel Broking said, "TCS reported a 7.2% qoq growth in revenues to $5.42bn which was significantly ahead of street estimates. In rupee terms, revenue grew by 4.7% qoq to Rs 40,135 crore. Gross profit for the quarter was up 8.7% qoq to  Rs 16,420 crore while gross margins expanded by 150 bps qoq to 40.9%.

EBIT for the quarter registered a growth of 16.2% qoq to  Rs 10,515 crore while EBIT margins expanded by 260 bps qoq to 26.2%. Net profit for the quarter excluding legal claim provisions was up by 20.3% qoq to Rs 8,433 crore.

The Q2FY21 numbers were well above street expectations on all counts, while new deal wins remained strong at $8.6 bn for the quarter which was a key positive. We believe that the TCS numbers will be well received by the markets and will be positive for the entire IT sector."

In Q1 of current fiscal, the IT firm reported a 14% fall in net profit to Rs 7,008 crore as business was disrupted by coronavirus pandemic. The Mumbai-headquartered company posted consolidated net profit of Rs 8,131 crore in the same quarter of financial year 2019-20.

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