TCS shares jump over 1% ahead of Q4 results announcement; Nifty 50 settles above 17800, Nifty IT gains 1% Tata Consultancy Services Ltd shares rose 1.5% on Wednesday ahead of the Q4 results announcement. TCS stock touched an intraday high of Rs 3,260.95 and closed at Rs 3,245.50. In comparison, NSE Nifty 50 rose 90.10 pts or 0.51% settling at 17,812.40 and Nifty IT surged 304.55 pts or 1.06%, concluding at 28,980.30. The company’s revenue in the fourth quarter may have risen as much as 17.6% on-year and the revenue growth would be driven by spending on cloud and digital programs, cost take-outs and wallet share/vendor consolidation gains, according to analysts. Sequentially, TCS earnings are likely to show weak growth, primarily due to currency headwinds, and less number of working days in the quarter. “We expect the company to report 1 per cent CC revenue growth for the quarter,” said ICICI Securities. “We expect 100 bps cross-currency tailwinds due to GBP and EUR appreciation against US$. Hence, dollar revenues are expected to grow 2 per cent QoQ,” ICICI Securities added. Q4 is a seasonally weak quarter due to fewer working days and some furlough impact in January. TCS shares have fallen nearly 3% in the past one month and over 12% in the last one year. However, the stock has risen over 100% in the past 5 years. At the current market price of Rs 3242.50, the company’s market capitalisation stands at Rs 11.86 lakh crore. The shares hit an intraday low of Rs 3,199 on Wednesday. TCS stock touched a 52-week high of Rs 3,738.60 on 12 April 2022 and a 52-week low of Rs 2,926 on 26 September 2022.
However, he believes that the impact on the Indian market is going to be temporary since there could be some short-term impact on flows into Indian equity markets. But since the Indian economy is on a strong wicket and will continue to remain resilient.
“Improved fiscal situation, controlled current deficit, stable interest scenario combined with good corporate earnings should lead to limited impact on the Indian bond market and equity market too,” he added.
The midcap and smallcap indices took a bigger knock with the BSE MidCap fell 2.51%, while BSE SmallCap index dived 4.18%. According to Amnish Aggarwal, head, research, Prabhudas Lilladher, the valuations were already high and some correction was expected. “If the situation sustains as it is then further correction can’t be ruled out,” Aggarwal said.
Telecommunication and industrials indices were the top laggards with BSE Telecommunication declining 3.82%, followed by BSE Industrials falling 3.26%. JSW Steel (-2.99%), Tata Steel (-2.52%) and Tata Consultancy Services (-2.44%) were the top losers of Sensex.
Surprisingly, both foreign portfolio investors and domestic institutional investors were net buyers today. While, FPIs net bought shares worth Rs 252.25 crore, DIIs have purchased shares worth Rs 1,111.84 crore, as per provisional data from exchanges.
Calling this a “normal phenomena” Pankaj Pandey, head, research, ICICI Direct said, “I will not really give too much weight to a single day buying figure. Amid concerns of elevated interest rate and geopolitical tensions, in a typical market cycle, 8-10% correction is possible at any point in time.”
The brunt of geopolitical conflict, elevated interest rates and rising crude oil prices was also felt by other Asian- Pacific markets. Jakarta Composite Index lost 1.57% followed by Shanghai Composite Index and PSEi, which fell 1.47% and 0.89%, respectively. Nikkei and KOSPI declined 0.83% and 0.76%.