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IT stocks gain: TCS tops 9 trillion in m-cap, HCL Tech m-cap at 2 trillion

The TCS stock gained 5.5% in intraday trade on Monday to reach a record high of Rs2,504.20 on BSE

Tata Consultancy Services Ltd on Monday crossed Rs9 trillion in market capitalization, becoming the second Indian company to achieve the milestone after Reliance Industries Ltd.

Also, HCL Technologies Ltd hit the 2 trillion market cap mark for the first time as its shares rallied following a robust guidance by the software services firm.

The TCS stock gained 5.5% in intraday trade on Monday to reach a record high of Rs2,504.20 on BSE, giving the IT bellwether a market cap of Rs9.36 trillion. It closed at Rs2,493.20 apiece, with a market cap of Rs9.35 trillion.

TCS is likely report reasonable growth with challenges in financial services and retail verticals for the September quarter, according to Kotak Institutional Investors. The brokerage firm expects constant currency revenue growth of 2.6% and cross currency headwind of 75bps on a sequential basis during the June quarter.

It expects earnings before interest and tax margin to expand 150 basis points sequentially in September quarter but decline 80 bps year-on-year because of marginal weakening of the rupee. Absorption of wage revisions and higher billing days will lead to sequential increase in Ebit margin, it said.


Meanwhile, shares of HCL Technologies surged more than 10% to a record high of Rs794.90 apiece on BSE after the firm informed exchanges that it expects revenue and margins to be “meaningfully better than the top end of the guidance". HCL projected revenue growth in constant currency terms to exceed 3.5% sequentially and margins in the range of 20.50-21%.

Kotak said it believes that revenue growth and profitability of HCL Tech will be boosted by completion of the acquisition of select IBM products. It expects a constant currency revenue growth rate of 5.7%, of which 0.7% will be organic with the balance being contribution from the completion of purchase of the IBM products.

Of 48 brokers tracking the TCS stock on Bloomberg, 18 have “buy" ratings, 13 recommend “sell" and 17 have “hold" ratings. For HCL Tech, 39 have “buy" ratings, 6 have “hold" and 2 have “sell" ratings.

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