In the Last 1 Year, TCS Stock Check is Up By 15%. Is it the right time to invest?

By Consultants Review Team Thursday, 12 October 2023

This year, the Indian markets have been on a tear, reaching several highs. The generally favorable market attitude, combined with some improvement in headwinds, has also resulted in a robust comeback in the IT index, which underperformed benchmarks by about 30% in 2022. Tata Consultancy Services (TCS) was also involved in the recovery.

The stock has risen over 15% in the last year and 9% year to date in 2023. In comparison, the Nifty IT index has gained more than 16% in the last year and more than 12% in 2023 YTD.

So far in the current calendar year's first ten months, the stock has returned positive in seven months and negative in three. It is up roughly 1% in October, extending gains from a 5% increase in September. It had already lost roughly 2% in August.

Meanwhile, the stock was up for four months in a row between April and July. It has previously lost consecutively in March and February. It also increased by more than 5% in January.

On October 9, 2023, the stock likewise reached its 52-week high of $3,680. The stock is currently trading at 3,610, up more than 18 percent from its 52-week low of 3,053.30 on October 13, 2022.

TCS kicked off the September results season yesterday, reporting a 9% increase in net profit to 11,342 crore, up from 10,431 crore in the same time previous year. Net profit increased sequentially by only 0.5 percent. In Q2, the company's profit exceeded Wall Street projections.

Meanwhile, its operating revenue increased 7.9 percent to 59,692 crore, up from 55,309 crore in the same period last year. The operating margin increased by 0.3 percent year on year to 24.3 percent, while the dollar sales for the IT giant was $7,210 million, up from $7,226 million in the previous quarter.

The company's order book at the end of Q2FY24 stood at $11.2 billion, up from $10.2 billion in the previous quarter, and the book-to-bill ratio was 1.6. TCS achieved the second-highest quarterly TCV ever. Deal wins increased by 9.8 percent during the quarter compared to the previous quarter.

"Strong deal momentum delivered us a very large order book in Q2 - our second-highest TCV in a quarter ever - as well as a good pipeline." "We are confident in our longer-term growth prospects because of the resilience of demand for our services, our clients' willingness to commit to long-term programmes, and their continued appetite for experimentation with Generative AI (Gen-AI) and other new technologies," said K Krithivasan, TCS's Chief Executive Officer and Managing Director.

Payable on October 11, 2023, to reward shareholders, the board of directors also declared its second interim dividend of USD 9 per equity share of USD 1 each. And after reporting its first quarter results in July, TCS announced a similar interim payment of USD 9 per equity share of USD 1 each.


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