Shares of TCS jump 3% ahead of Q3 earnings

TCS, a significant player in the IT industry, is seeing its share price rise today ahead of its results report later this evening. On the day of the earnings, January 9, the stock price rose 1% at the opening and kept rising. The company’s shares were up 96.30 over the previous closing on January 6 and were trading 3% higher at 3,308.30 at 11:17 a.m.

Today is the first day of earnings season, and TCS is predicted to have had a modest increase in the three months that concluded on December 31, 2022. Brokers anticipate that the business will report a minor increase in sales, but that margins may stay unchanged.

On January 9, TCS will also take into account the third interim dividend for FY23. The corporation set January 17 as the record date to decide who was entitled to receive the third interim dividend last month.

The stock had a 52-week high of $4,045.50 on January 18, 2022, and a 52-week low of $2,926 on September 26, 2022. In the last year, the stock has lost $544.40, or 14.12%, as opposed to the Sensex’s rise of 1.77%.

Since the beginning of the year, the stocks of IT businesses have been declining, with the S&P BSE IT index decreasing by around 23% as a result of weaker demand in the context of rising interest rate scenarios, high inflation, and the likelihood of an economic recession in 2023.

According to HDFC Securities, TCS will post Q3 sales of $6,958 million, an increase of 1.2% from the previous quarter. In rupees, this equates to revenue of 57,058 crore.

The firm anticipates modest growth, helped by ramp-up from significant contract wins in prior quarters, although margins may stay unchanged as a result of easing supply-side limitations.

TCS has a buy recommendation from BNP Paribas, and their target price is 3,314.65. “Sharper-than-expected decline in global economic activity and GDP growth, margin pressure from increased competition, moderation in demand leading to a higher-than-expected impact on margin, and sustained appreciation of the INR vs. the USD are downside risks to our DCF-based TP,” the brokerage stated.