Tata Consultancy Services (TCS) on Monday hit a new high of Rs 2,214.65 on the Bombay Stock Exchange (BSE), up 4.27 per cent, a day before its results announcement for the September quarter.
The stock rose on the back of rival
Infosys' strong numbers reported last week and a research firm's findings that pointed to a strong rebound in technology contracting activity across the globe.
Infosys, which struggled for the most part over the last two years, surprised the Street for the second quarter in a row last Friday when it reported
revenues of $2.06 billion for the September quarter, up 3.8 per cent sequentially. Analysts were expecting a growth of about 2.6 per cent.
Clearly, the market now has higher expectations from India's largest IT services exporter, TCS.
"Whenever Infosys delivers good results, the market expects TCS to deliver better. The market is expecting TCS to grow revenues 4.5-5 per cent sequentially," Sanjeev Hota, analyst with brokerage house Sharekhan said. "Investors were perhaps also reacting to the ISG data," he added.
The ISG Outsourcing Index, which provides a quarterly review of sourcing industry data, said on Thursday that annual contract value of deals were just under $6 billion in the third quarter - up one per cent year-on-year and 66 per cent sequentially. That made this the best third quarter ever. The research firm said the market was being fueled by smaller deals and yet the September quarter saw 10 mega deals.
The third quarter - second quarter for Indian companies that follow the April-March calendar, is typically the strongest in IT contracting activity. Contracting slows down in the December quarter because of the more number of holidays.
But as of now all eyes are on TCS - if it delivers revenues higher than 5 per cent in the September quarter, it will firmly entrench its position as the industry's bellwether.
Infosys closed 1.52 per cent up on BSE at Rs 3,323.50 on Monday. The BSE Sensex closed 78.95 points higher at 20,607.54.
PHOTO: Reuters 
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