TCS gains 2% to reach a 10-week high; Inventory is approaching an all-time high

Shares of Tata Consultancy Services (TCS) hit a 10-week high at Rs 3,835.50, up 2 per cent over BSE in trade during Tuesday. The stock rose for the third day in a row, gaining 4 percent during the period. It is trading at its highest level since January 24, 2022 and is just 5 per cent away from the record high of Rs 4,045.50 touched on January 18, 2022.

On March 31, 2022, the Information Technology (IT) major announced that the Company’s Board of Directors will meet on Monday, April 11, 2022, to consider the financial results for the quarter and full year ending March 31, 2022.

On Monday, April 4, the company informed that it has signed a multi-year physical contract with a large US company to expand its long-standing partnership to accelerate their cloud transformation journey and transform the technology landscape into a modern hybrid cloud stack for greater flexibility. Flexibility and improve operational flexibility.

Meanwhile, last month, TCS ended its Rs 18,000 crore share repurchase program, its fourth since 2017. The company bought 40 million shares through a buyback offer. After the buyback, the Promoters and Promoters Group’s stake in TCS rose to 72.30 percent from 72.19 percent.

TCS is one of the leading IT service providers with a presence in BFSI, telecom, manufacturing, retail and high technology. Steady organic revenue growth and industry leading margins (>25 percent).

TCS is the main beneficiary of the multi-year growth (15-20 percent) in digital technologies. “There will be short-term marginal pressure but we believe that since clients are aware of cost pressures and are receptive to price increases on deals, this will mitigate any short-term impact on margins,” ICICI Securities said.

The company believes it is making investments in areas of future technologies, such as contactless payments, battery management software for electric cars, etc., which will help it participate in larger deals, in the future, the brokerage said. It expects the stock to eventually challenge its lifetime highs in the coming months with a target of Rs 4,070.

TCS remains in a better position to take advantage of the long-term structural tailwind in technical services and should see a relative rebound in growth as a primary effect and increased aggressiveness helping it.

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