TCS share price hits new 52-week high on partnership expansion with supermarket chain Morrisons

TCS share price hit a fresh 52-week high of Rs 2,544.45 apiece, up 3.63 per cent in an otherwise weak market on Tuesday. The IT giant, in a press release, announced that it has expanded its partnership with a leading supermarket chain in the UK, Morrisons, through a five-year contract for application management services, data services and cybersecurity services. Tata Consultancy Services stock surpassed its previous high of Rs 2,538 apiece on September 15, 2020. Analysts say that TCS enjoys a leadership position in the IT services industry driven by strong new-age offerings and best in class methods and practices. “In the last few quarters, TCS has secured strong order intake which provides near term growth visibility. We expect TCS will remain a key beneficiary of buoyant tech demand given its global scale, diversified clientele and strong cash-rich balance sheet,” Suyog Kulkarni, Senior Analyst- IT services, Media and Internet at Reliance Securities, told Financial Express Online.

TCS shares have rallied 41 per cent from March low of Rs 1,504.40 apiece. In the afternoon deals, TCS stocks were trading 3.05 per cent higher at Rs 2,539.85 apiece as compared to a 0.55 per cent fall in the S&P BSE Sensex. The partnership between TCS and Morrisons will help accelerate the latter’s plan to simplify and modernise its technology to improve the shopping trip, eliminate wasted effort and become more popular and accessible to its customers. Morrisons selected TCS as its Application – Managed Services partner in 2016, to improve the customer and employee experience. Since then, TCS has worked closely with the retailer to help drive its growth and modernisation agenda across various lines of business, leveraging its comprehensive portfolio of business and technology services and solutions.

Research and brokerage firm Elara Capital has maintained an ‘accumulate’ rating to TCS. “Large deals delayed in April and May have come back in the pipeline toward the end of June, with TCS appearing confident of signing incremental transformational deals,” it said. While Motilal Oswal Financial Services expects a series of earnings upgrades this quarter (Q2) ranging between 5-10% for large-cap IT names. “Over the medium term, we expect TCS to be a key beneficiary of the COVID-19-driven increase in technology intensity across verticals,” it said. The brokerage firm also added that the continued traction in large deals, a healthy pipeline, and better resilience in BFSI are encouraging factors for TCS.