Shares of Tata Consultancy Services Ltd surged 5% on Thursday as brokerage firms raised their target price for the stock after the IT major reported better-than-expected earnings for the September quarter.

The TCS stock was up for ninth consecutive session today and has advanced 23.4% during the period.

The stock hit a lifetime high of 2,875 a share. At 1035am, the scrip traded at 2,856.5 apiece, up 4.4% from previous close.

Other IT stocks also traded higher.

Wipro Ltd surged 5% after the company said its board will meet on 13 October to consider a buyback of shares and earnings for the September quarter. Infosys gained 4.6%, HCL Technologies 4.4%, Tech Mahindra 4%, Mindtree advanced 11%, Mphasis 7%, and L&T Infotech surged 9%.

The BSE IT Index climbed 1.3%.

"TCS reported strong all-round growth driven by market share gains, and resilient spending by clients. Strong revenue growth qoq in constant currency drove a sharp margin expansion and net profit outperformance. TCS will be at the forefront of the transformation journey of clients backed by its full spectrum of offerings, ability to shape and stich together integrated deals and excellent product and platform offerings", said Kotak Institutional Equities in a report to its investors.

TCS reported sequential constant currency revenue growth rate of 4.8%, beating Kotak's estimate of 2.9%. Revenues grew 7.2% quarter-on-quarter to 40,135 crore. The strong revenue growth flowed through EBIT margin that increased 260 bps sequentially and 220 bps year-on-year.

Management has indicated that the industry is witnessing the first phase of multi-year technology transformation cycle. While cloud adoption will serve as the first phase, as enterprises utilise capabilities enabled by cloud, subsequent technology transformation cycles will kick in. The company plans to roll out salary hikes effective 1 October and has increased recruitment globally.

Deal booking was also very strong at $8.6 billion, up 25% quarter on quarter, possibly due to the Phoenix deal. The board has approved share buyback worth 16,000 crore at a price of 3,000 apiece. The size of the buyback is in line with the buybacks announced in 2017 and 2018. Besides the buyback, the company has also announced a Rs12/share interim dividend.

"We upgraded our earnings estimates for FY2021E/FY2022E/FY2023E, factoring in strong beat in both revenue and operating margin. We continue to prefer TCS on account of a strong business model, stable management, solid execution and strong free cash flows (FCF) generation...We expect TCS’ revenue and earnings would clock an 11%/13% CAGR over FY2021-23E", brokerage firm Sharekhan said in a research report.

It has raised its target price on the stock to 3,150 apiece, while BoB Cap has increased target price to 3,180 a share. Emkay Research has set a target price of 2,780 for the stock.