TCS AND INFOSYS STOCK PRICES TIME-SERIES ANALYSIS AND PREDICTION USING THE ARIMA MODEL

Abstract

The IT and ITES industry has been the bedrock of India’s economic and social growth for the last two decades. Today the
Indian IT industry is not only one of the world’s largest but it also represents the aspirations of India’s burgeoning and
vibrant middle class. It has been the pioneer in employment generation in the country. This is an impact of major Fortune
500 and Global 2000 multinational corporations outsourcing IT services to India. The IT industry has been a major
contributor to India’s GDP growth (both domestic and international export revenue). The IT sector has been a lucrative
domain of stock market securities investment for quite a few years. We know that the Stock Exchange is an integral and
important part of a Nation’s economy. Two of India’s largest IT companies are TCS (Tata Consultancy Services) and
Infosys in terms of market capitalization, traded volume and employee strength. This paper attempts to analyze the weekly
closing stock prices of TCS and Infosys for a span of more than 18 years, ranging from the 1st week of January, 2003 till
the 3rd week of March, 2021. This paper also attempts to forecast the BSE weekly closing stock prices of TCS and Infosys
for the next 5 years (260 weeks) at a weekly frequency. The paper also attempts to do an accuracy testing of the predictive
model generated. This paper would be beneficial for both academic research purposes and for the individual investors who
can use stock market predictions to make timely, informed and wise decisions to maximize their capital investments. The
methodology employed in this paper for analyzing and forecasting stock prices of TCS and Infosys is Time Series Analysis
using the ARIMA Model.