TCS shares jump over 4 per cent after strong June-quarter earnings

TCS shares climbed more than 4 per cent after the company reported a rise in June-quarter profit and expressed optimism about demand improving in the current quarter. The earnings also lifted other IT stocks and supported a broader market rally

New Delhi: Shares of TCS climbed more than 4 per cent on Friday after the country’s largest IT services company reported a 4.61 per cent increase in its June-quarter net profit and expressed optimism about an improvement in demand, which had been affected by the West Asia crisis, during the ongoing quarter.

The bellwether stock jumped 4.11 per cent to Rs 2,132 on the BSE.

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At the NSE, it climbed 4 per cent to Rs 2,133.30.

TCS on Thursday reported a 4.61 per cent increase in its June-quarter net profit to Rs 13,349 crore.

Other IT stocks were also trading in positive territory, driving the markets higher.

The 30-share BSE Sensex traded 786.77 points, or 1.04 per cent higher, at 77,541.02. The 50-share NSE Nifty surged 249.70 points, or 1.04 per cent, to 24,213.

In the results, which come amid heightened concerns over sustaining growth in the USD 315 billion domestic IT sector in the age of artificial intelligence, TCS said its net income rose 8.5 per cent year-on-year to Rs 13,849 crore, excluding exceptional items.

The company’s Managing Director and Chief Executive, K Krithivasan, said the demand environment remained sluggish during the reporting quarter amid ongoing conflicts and noted that the first quarter also saw some clients defer work. However, although the conflicts continue, he expressed optimism.

“We are still optimistic that the demand will resume sometime in Q2 primarily because our customers have a significant amount of pent-up technology backlog to be completed,” he said during a call with analysts.

From a topline perspective, TCS’ revenue rose nearly 14 per cent year-on-year to Rs 72,275 crore in the June quarter and was up 2.23 per cent from Rs 70,698 crore in the March quarter. It reported annualised AI revenue of USD 2.6 billion, up 13.6 per cent quarter-on-quarter.

Krithivasan said the quarter reflected continued growth momentum and the strength of the company’s strategic positioning despite geopolitical and macroeconomic headwinds.

“As customers accelerate investments in AI, modernization, cybersecurity, sovereign cloud and platform simplification, our strong deal conversion, improving client mining and expanding ecosystem partnerships position TCS well to translate opportunity into sustained growth,” Krithivasan said in a statement.