Mumbai: BSE’s information technology (IT) sector index surged to a record, led by gains in shares of Tata Consultancy Services Ltd (TCS), which also tested a new high on Friday after beating earnings estimates.
TCS posted a 15.5% rise in consolidated net profit as volume surged to its fastest growth in seven quarters backed by growth in the US.
Also, Mindtree Ltd’s June quarter profit jumped by nearly 50%, beating market expectations, driven mainly by higher spending by clients and forex gains. The mid-sized software services firm said it was on track to deliver stronger growth in the year ahead.
These strong results bode well for the $108 billion Indian IT sector’s fortunes in the second half of 2013, coming after rival Infosys Ltd announced similarly buoyant numbers.
“Healthy set of results by TCS shrug off any concerns regarding health of the Indian IT sector which were raised due to weak performance by global players like Accenture and Oracle,” Anikta Somani, research analyst at Angel Broking Ltd, said in a note.
“We remain positive on TCS, which has been a consistent performer, but owing to recent sharp run-up in the stock price, we maintain neutral rating on the stock,” she added.
Earlier in the day, the BSE IT Index touched an all-time high of 7,124.07 points, up 3.19% from the previous close of 6,903.51 points, while TCS jumped as much as 5.6% to Rs.1,753.90. Mindtree shares rose as much as 5.7% to Rs.966.20, the highest since March 2007.
TCS shares closed 4.92% up at Rs.1,741.90, while Mindtree shares ended 3.08% higher at Rs.942.60 on BSE on Friday. BSE’s IT index stood 2.81% higher at 7,097.29, while the 30-share Sensex gained 0.11% to 20,149.85 points.