TCS shares are hot again as investors hope for a quarterly surprise
- Tata Consultancy Services (TCS) ended Monday 3% higher than its last trading session.
- On Tuesday, TCS share price continued to increase by nearly 1% in early morning trade before dipping below the previous day’s closing price.
- JP Morgan Funds bought over 11.23 lakh shares of the company at ₹2,199 per share on Monday, ahead of TCS’ first-quarter earnings scheduled for July 9.
Block deal data on the Bombay Stock Exchange (BSE) showed that JP Morgan Funds bought over 11.23 lakh shares of TCS at an average price of ₹2,199 per share yesterday, amounting to a total deal of ₹247 crore. These were sold by Flagship India Investment Company (Mauritius) early in the day in a separate transaction.
AdvertisementThe gains in TCS’ share price come ahead of it being scheduled to announce its first-quarter earnings on July 9. Its current market capitalisation stands at ₹8.49 lakh crore.
Last quarter, TCS profits were down by 3.6% and revenue dropped 2.54% due to the lack of demand from foreign clients. However, despite the muted results, the stock jumped 4.5% from ₹1677.6 to ₹1752.8 the very next day. Before the results, its share price had lost 22% of its value amid the coronavirus lockdown.
This quarter, the hope is that a weaker rupee may turn things around for IT services companies, including TCS, since they’re primary exporters, billing in dollars. Last quarter, the movement in currency exchange rates resulted in a positive impact of 0.1% for TCS in reported revenue.
While the rupee is significantly weaker since the start of the year, the change has been marginal in the three months between March and June.
TCS share price closing on Monday at ₹2,269 was only 1.45% short of its 52-week high of ₹2,296 before weakening on Tuesday (July 7).
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