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Home / Markets / Stock Markets /  TCS shares pierce through 3000 level to new highs

TCS shares pierce through 3000 level to new highs

TCS shares were up 4% in afternoon trade

  • Analysts expect IT companies to post good quarterly numbers

Shares of TCS surged 4% to a new high of 3042 on expectations that IT companies will post good quarterly numbers. TCS will announce its Q3 earnings later this month.

Shares of TCS surged 4% to a new high of 3042 on expectations that IT companies will post good quarterly numbers. TCS will announce its Q3 earnings later this month.

"We expect Q3FY21 to continue to surprise, driving guidance upgrades by IT companies and estimate revisions by Street alike. In fact, we argue Indian IT companies are poised to turn in the best Q3 in a decade given: i) highest-ever order books; ii) marked revenue acceleration; iii) margin expansion; and iv) ongoing outlook upgrades, Edelweiss Research said in a report.

"We expect Q3FY21 to continue to surprise, driving guidance upgrades by IT companies and estimate revisions by Street alike. In fact, we argue Indian IT companies are poised to turn in the best Q3 in a decade given: i) highest-ever order books; ii) marked revenue acceleration; iii) margin expansion; and iv) ongoing outlook upgrades, Edelweiss Research said in a report.

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In the IT space, Edelweiss likes Infosys, HCL Tech, TCS, Tech Mahindra, Mindtree, LTI, LTTS, eClerx, Persistent, and Cyient.

Naveen Kulkarni, Chief Investment Officer, Axis Securities, says he expects IT and consumer companies to post good quarterly numbers.

Meanwhile, the Sensex was firm above 48,000, trading 0.6% higher in late trade.

"Today, the Indian market tested a fresh high of 48,000 at Sensex, amidst a positive development on the vaccination front. Overall, the investor sentiments have been lifted after the emergency approval given by DCGI on two Coronavirus vaccines: Covishield & Covaxin. A strong December closing has laid the platform for a solid 2021. We continue to believe that 2021 will be the year of mid and small caps. 2021 is likely to outperform, similar to 2020 . Our core themes - digital, telecom, pharma, rural, staples and consumer discretionary, continue to remain relevant in 2021. Pharma & IT were the top performing sectors of 2020, while banks were negative," he said.

Another brokerage Motilal Oswal remains positive on IT companies. "In Tier I, we expect INFO/TCS/HCLT to drive organic growth (4%/3%/3% QoQ, including cross-currency tailwind) despite a high base and season weakness. Accenture’s recent earnings showed a strong increase in its Outsourcing vertical, indicating demand normalization/recovery. Coupled with strong deal wins across the IT sector, we expect an increase in guidance/positive commentary," it said.

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