TCS market capitalisation nears $100 billion-mark

TCS market capitalisation nears $100 billion-mark”

Country's largest software services exporter TCS on Monday hit the historic $100-bn mark in market capitalisation after its stock touched an all-time high of 3,557 level in early morning trade.

On the BSE, TCS was the top gainer among the Sensex pack, surging 6.76%, or Rs. 215.75, to close at a new high of Rs. 3,406.40. Following the uptick in the counter, the market capitalisation of the company swelled to Rs 6,80,912.10 crore.

The company announced results on Thursday and saw shares rising 2.65% by Monday to Rs3,496 per share. The rupee breached 66 against the dollar on Friday, falling 25 paise to hit a 13-month low of 66.05 a dollar. TCS' market cap is more than that of all other IT index companies put together.

Deal wins in January-March helped the Mumbai-headquartered company post its biggest-ever net profit in the quarter.

Most brokerage houses maintained their ratings as the stock has already rallied more than 50 percent in the last one year, but raised the target price on the stock post its earnings.

Looking ahead, TCS expects a rebound in spending by its key banking, financial services and insurance (BFSI) clients this financial year.

"Justifying current valuation requires baking in United States dollars 2.1 billion of incremental revenue in FY19 and justifying current valuation requires 11 percent CAGR over the next 7 years", it said.

Global brokerage Nomura however has a "reduce" on TCS shares, citing high valuations.

Analysts are bullish on TCS after it reported a 3.8% quarter-on-quarter growth in fourth-quarter revenue at Rs. 32,075 crore.

Revenue growth came at 8.2 per cent (YoY).

"We retain Reduce as we find valuations expensive at ~20x FY20F and see risk to street expectations of ~double-digit constant currency (CC) revenue growth and flattish margins". The company also announced a 1:1 bonus and a Rs 29 final dividend that improved sentiment among investors. The board recommended a 1:1 bonus share issue.

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