TCS shares jump 1% over £800 million deal with JLR

Shares of Tata Consultancy Services (TCS) jumped nearly 1 percent in early trade on September 7, after the country’s largest software services firm announced a strategic partnership to transform Jaguar Land Rover’s (JLR’s) digital estate. The partnership is valued at £800 million (around Rs 8,300 crore) over the next five years.

At 10:01 am the TCS stock was trading 0.56 percent higher at Rs 3448 on NSE.

Details of the strategic partnership deal

Tata Consultancy Services (TCS), India’s largest IT services company, has joined hands with the digital unit of Jaguar Land Rover (JLR) in a substantial 800-million-pound partnership spanning the next five years. The collaboration aims to help JLR develop a forward-looking technology infrastructure that aligns with its “Reimagine” strategy according to an exchange filing on September 6.

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TCS will leverage its IT expertise to provide cutting-edge technology solutions, enhancing JLR’s efficiency, sustainability, and competitiveness in the ever-evolving future ready digital services for their clients.

Also Read: TCS wins $1bn deal from Jaguar Land Rover

Brokerage Views

Goldman Sachs has given a “Buy” rating to the TCS stock with a target of Rs 3,930 per share in a recent research report. The global brokerage firm anticipates TCS benefiting from vendor consolidation, attributing this advantage to the company’s extensive vertical expertise.

Meanwhile brokerage firm ICICI Securities on the TCS deal stated that, “the new deal valued at £800 million (~US$ 1 billion) over the next five years, represents an expansion and deepening of their enduring relationship. We note that TCS deal wins in Europe has been robust (sixth major deal in CY23) and will long term revenue visibility. Key will be ramp ups on new deals which has been slow.”

Brokerage firm KRChoksey has assigned a target of Rs 3,915 to the TCS stock in a report released on July 14. The firm further stated that that, “the demand drivers of the company are intact, with a few signs of slowdown.”

Brokerage firm Reliance Retail has assigned a buy’ rating to the TCS stock in a report released on July 14 with a target price of Rs 3882 signifying a potential upside of 19.1 percent from the current market price. The report further stated that the results were in-line with expectations.

Stock Performance

TCS stock has given a return of 1.02 percent over the past six months. The benchmark Nifty50 index has given a return of 10.15 percent over the same duration.

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