Shares of the country’s largest software company Tata Consultancy Services spurted by 20 per cent to touch an all-time high in early trade on the Bombay Stock Exchange on Friday, boosted by smart growth in net profit for the first quarter of FY2011-12, which analysts termed as above market expectations.
The stock, which opened the day on a strong note, surged by 20 per cent to touch a lifetime high of Rs. 1,350.30 in early trade on the BSE. However, shortly thereafter, the scrip pared some of the gains and was trading at Rs. 1,152, up 2.38 per cent from its previous close.
On the National Stock Exchange, the scrip surged by 4.82 per cent to touch an early high of Rs. 1,177.90.
The scrip was the top gainer among the 30 stocks in the Sensex pack.
“TCS reported Q1, FY’12, results ahead of our estimates. The comprehensive outperformance on all parameters demonstrates strength of demand. However, we continue to believe that margin levers for the company are stretched. We revise our estimates upward and reiterate our ‘BUY’ rating,” brokerage firm Prabhudas Lilladher said in a note.
TCS on Thursday posted a 26.7 per cent rise in net profit to Rs. 2,415 crore for the first quarter of FY2011-12.
Its revenues grew by 31.4 per cent to Rs. 10,797 crore for the period under review. The board has proposed a dividend of Rs. 3 apiece on shares of Re 1 face value.
“Results were encouraging and above the street expectation, which is why the stock is seeing good buying by the investors,” Geojit BNP Paribas Financial Services Research Head Alex Mathews said.