TCS Price Volatility : Results and The Future Prediction

Tata Consultancy Services or TCS is the largest IT company in India given its market capitalisation. However the market leader is currently facing multiple issues given the current market volatility in India. TCS has recorded a bad result this time as it missed out on the estimates of Dalal Street. The company has initiated a lot of projects and patent filing and is progressing quickly in the field of metaverse.

However these progressions do not indicate the request and growth in tangible manners. The results indicate that the employee hiring has decreased this quarter to 14000 and more which was at an average of more than 23000 every quarter. Also the company’s stock was hit heavily due to the result announcements and is currently trailing at the 52 week low prices.

Results

Amidst the results the global demand has supported the balance sheet of the company. TCS has deals worth more than 8 billion dollars in its pipeline. Out of them multiple deals are even more than 400 million dollars. The reason behind the same is the robust demand for technology given the cloud transition, operating model transformation initiatives, focus on the customer experience etc. This has been bringing a lot of business to the company. However the numbers are slightly skewed in the balance sheet. 

The headcount of TCS remains at 606311 employees and it has increased the same for more than 20% on a YOY basis. The attrition numbers have also been reflected positively for the company. The company has a revenue of 6.8 billion dollars which means a growth of more than 16% on a YOY basis as per the Indian Rupee. 

The global business figures reflect that the North American business grew at 19.1% this year. Also the business from Europe and U.K. grew at 12%. The major reason behind the worries is the Indian slowdown of business. The company has revealed that the Indian business of the firm has been on the decline. The reason is the volatility in the Indian business segment. This has also been the reason for implementing a selective approach to penetrate the Indian market.

Other Achievements

TCS has been very aggressive in registration of new technology and methods under its name. This means it has been making a continuous way into the patent department. The company has filed more than 6750 patents which means more than 750 patents on a YOY basis. Also the grant has been given for more than 2400 patents from the same. 

Metaverse has been one of the key focuses for the company this year. The company has been working on various metaverse related projects. TCS has partnered with multiple TATA group companies to provide metaverse solutions. The company has also been focussing with a project of a telecom vendor to develop  an ecommerce project.

The Share Price Movements

TCS has been in the news since its buy back. The company issued a buy back programme at 4500 Rs power share, Thai excited the entire market pool and people bought the TCS shares in bulk to avail the offer, however currently the ones who did not get selected for the buyback opportunity are suffering, The TCS share saw a hike above 4000 Rs for once this year. However for the 52 week high the company has recorded a price for 4040 Rs. After that the price of the share has been on the decline continuously. Post 52 week high the current position of the share prices is worse.  

The company’s bad results have impacted the entire share valuation of the same. The Shares of the company have tumbled from 4040 Rs to less than 3000 Rs. This means almost 25% above loss in valuation. The shares of the company did this entire journey in less than 2 months time. This has happened one account of multiple global crises and the decline of its business in the Indian market.

Another reason for the fall is the unsupportive Indian market. The Indian index Nifty50 has lost almost 2000 points of gain and even more in the past few months. The lows of the index were almost 2700 points from the 52 week high. The markets have been in this state due to the rising inflation and deteriorating valuation of Indian currency.

Further Assumptions

It can be well assumed that the company will get back on its feet by the end of this financial year. The reason is its 8 billion dollar worth of deals in the pipeline and the recovering state of business. The global and even the Indian business has been on the rise since the interest rate hikes and the consumer demand. 

The reason behind the same is the world is going online and hence the development of such platforms fall under the category of the TCS work segment. Also on the other hand the COVID pressure is reducing now and hence the company can get the maximum benefit from the rapid increase in business that may follow up in the next few months.