5 hrs ago
IT Stocks Rally as TCS Results Lift Market Valuations
Tata Consultancy Services, or TCS, reported higher profits for the July-to-September quarter.
After the announcement, its share price rose, and other IT company shares went up too.
Together, the named companies gained more than Rs 65,000 crore in market value.
The rise helped the Indian stock market recover.
The gains came even though the US had suspended eight technology firms from a programme linked to employment-based green cards.
TCS said it had made only a few applications through that programme in the last two years.
It said it would follow US government directions and that it hires many workers locally.
Nasscom said immigration rules and the movement of skilled workers are separate issues.
An analyst said a long suspension could still make hiring and keeping workers more costly.
TCS shares rose 4.23% to Rs 2,163 after the company reported a 15% year-on-year rise in July-September net profit to Rs 13,884 crore.
Hexaware Technologies, LTM, Infosys, HCLTech, Wipro and Tech Mahindra also gained, and the named firms added Rs 65,648.78 crore in market value.
The BSE IT index advanced 2.91% to 27,406.62 as IT stocks helped drive a wider market recovery.
TCS said its single-digit PERM applications in the previous two years mean the US programme suspension is not expected to affect its workforce strategy or customer engagements.
Nasscom said immigration and skilled-worker mobility are distinct issues, while a market analyst cautioned that a prolonged suspension could increase localisation and retention costs.
- Who
- TCS and other Indian IT companies, investors, and Nasscom.
- What
- IT shares rallied after TCS reported higher quarterly profit, adding Rs 65,648.78 crore in market value among the named firms.
- Where
- Indian stock markets; the US PERM programme suspension was also discussed.
- When
- Friday, following results for the July-September quarter.
- Why
- TCS's better-than-expected results and its statement that the suspension was not expected to affect its operations supported investor confidence.
Limited immediate impact
Potential longer-term costs
Effect of the US PERM suspension
Limited immediate impact
TCS said its applications were in single digits over the past two years and that it does not expect the suspension to affect its workforce strategy or customer engagements. The report also said investors were reassured that the restriction concerns employment-based green cards rather than existing H-1B employment.
Potential longer-term costs
An analyst said a prolonged suspension could raise localisation and employee-retention costs for Indian IT companies over time.
How to interpret immigration and talent mobility
Limited immediate impact
Nasscom said immigration and skilled talent mobility are distinct issues and should not be viewed through the same lens.
Potential longer-term costs
The US suspension was framed as a measure responding to claims that the programme had shut Americans out of the job market.
Key facts
- TCS quarterly net profit
- Rs 13,884 crore, up 15% year on year
- TCS share performance
- Rose 4.23% to close at Rs 2,163 on the BSE
- Combined market value added
- Rs 65,648.78 crore by the named IT firms
- BSE IT index
- Rose 2.91% to 27,406.62
- Nifty close
- 22,520.45, up 1.30%
- PERM applications
- TCS said its applications under the programme were in single digits over the previous two years
- TCS US workforce approach
- The company said its strategy is anchored in local hiring and campus recruitment
Quotes
Tata Consultancy Services
Indian IT services company commenting on the US suspension of its PERM programme participation.
“Our PERM applications were in single digits in the last two years, and hence we do not expect the suspension of the program to impact our workforce strategy and customer engagements”
theprint.in
Sources
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