2 Min Read
BANGALORE (Reuters) - Shares in Tata Consultancy Services shot up as much as 12.4 percent on Tuesday, a day after India's top software services exporter said it expects to outperform the sector outlook, an indication it is poised to gain at the expense of rival Infosys(INFY.NS).
TCS' 23 percent rise in fiscal fourth-quarter profit, reported after markets closed on Monday, was in line with expectations.
However, the company's comments on its near-term prospects were far more bullish than those of Infosys, which on April 13 missed its own revenue guidance and gave a worse-than-expected forecast for the year ending next March.
"Solid, but appears to be inline, quarter. We believe confirms our view that Infosys (INFY) is losing share. TCS' wage plan will further challenge INFY, in our view," Wells Fargo Securities analysts said in a note after TCS' earnings report.
Several domestic brokerages including Enam Securities, HDFC Securities and B&K Securities upgraded their share ratings of TCS to "buy" from "hold" or "underperform" ratings before the results.
Infosys shares fell nearly 5 percent on Tuesday morning before pushing into positive territory. They had tumbled as much as 12.5 percent the day the company posted earnings early this month.
Tata Consultancy, which gave an average 8 percent salary increase to its staff in India and announced plans to hire 50,000 people this fiscal year, is on track to grow faster than the sector, Chief Executive N. Chandrasekaran told reporters on Monday.
India's $100-billion-a-year information technology and back office services sector will grow 11-14 percent in the current fiscal year ending March, the National Association of Software and Service Companies, or Nasscom, an industry group, estimates.
TCS shares were up 11.7 percent at 1:01 p.m. (0731 GMT) in a broader market that was up just over 0.6 percent.
Third-ranked Wipro will report earnings Wednesday.
Additional reporting By Abhishek Vishnoi in MUMBAI; Editing by Ranjit Gangadharan Aradhana Aravindan