India’s Largest IT Co. Breaks ‘Major Hurdle’; A Relief for Investors!

  • Stock Market Analysis

The mood of the Indian markets seems good, at least before the RBI’s monetary policy decision, due in the next few minutes. The Nifty 50 index is trading 0.67% up at 17,841, by 9:51 AM IST with a mixed sectoral breadth. Another day of a rally in Adani Group shares with Adani Enterprises (NS: ADEL ) hitting a 10% upper circuit limit is improving the overall sentiments.

The Nifty IT index is among the top-performing sectoral indices for the day so far, gaining 1.2% to 30,673 and one of its major constituents - Tata Consultancy Services (NS: TCS ) is coming on investors’ radar. It is an IT giant with a market capitalization of INR 12,70,623 crores making it the largest tech company in India and its shares hold a hefty weightage of around 28.19% in the Nifty IT index.

There‘s no doubt regarding the fundamentals of the company and its FY22 net earnings stood at the highest level, at INR 38,327 crores, bolstering its EPS (earnings per share) to a triple-digit 104.18. Q3 FY23 numbers were also good with a 17.2% YoY jump in revenue to INR 58,749 crores and an 11% YoY increase in net income to INR 10,846 crores, translating into a profit margin of 18.46%.

Image Description: Weekly chart of Tata Consultancy Services with volume bars at the bottom

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The daily chart structure of the stock is looking quite good to initiate long-term long positions. The stock surged 1.59% to INR 3,528.5 which is the highest level since May 2022. Not just that, the stock also crossed above a major hurdle of INR 3,500 which kept it from rising for the last 8 months. As this is a mega-cap company, expecting a very sharp rally or a quick move would be too much. Hence, this stock is more apt for patient traders/investors.

The next hurdle of INR 3,830 - 3,840 would be the next stop for the stock and below this level there are no strong selling zones, meaning the stock has a clear runway for the next ~INR 400 odd stretch. On the downside, a major support level is present at around INR 3,200 and it can be used as a stop-loss level for long trades. However, long-term investors might be better off if they plan to add more around this support level instead of exiting. 

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  • namami ghosh @namami ghosh
    yippie yippie yay yay! there in my portfolio
    Like 1

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