TCS shares rise on Q1 results, sector optimism
The IT index climbed 3.4%, its highest since January 2022. Analysts from Macquarie and Nomura highlighted growth in the North American market and potential future demand boosts.
Tata Consultancy Services saw its shares rise nearly 3% following its first-quarter results, signalling a potential turnaround for India’s IT services sector, which has faced sluggish demand. The IT index also surged 3.4%, its highest level since January 2022, reflecting positive market sentiment.
Analysts from Macquarie noted that TCS showed signs of recovery, particularly in its crucial North American market. They believe the worst may be over for the company as it navigates global economic challenges and anticipates a possible interest rate cut cycle later in the year.
Despite challenges like high interest rates and geopolitical uncertainties impacting tech spending globally, TCS reported growth across all verticals except telecom. Jefferies analysts highlighted TCS’s robust performance and noted a significant uptick in net hiring, indicating a positive trend.
TCS CEO K Krithivasan expressed cautious optimism about fiscal year 2025, citing volatile market conditions. Following the earnings report, several brokerages raised their price targets for TCS stock, with expectations pointing to continued growth momentum.
The day’s trading boosted TCS’s year-to-date gains to over 8%, outpacing the broader IT index’s rise of 7.5%. Analysts have upgraded TCS’s rating, with many now recommending a ‘buy,’ while peers like Infosys and Wipro hold similar ratings amidst competitive valuation comparisons.
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