After the Q1 profit miss, TCS shares drop 4.6% and reach a three-week low
TCS underperformed expectations for its quarterly profit on Monday, sending its shares down as much as 4.6 percent to a three-week low.
Image Courtesy: NDTV
Advertisement
Tata Consultancy Services Ltd.’s stock fell as much as 4.6 percent on Monday, reaching a three-week low, after the Indian IT giant missed expectations for quarterly earnings due to increased employee-related costs.
Following the IT services exporter’s announcement on Friday that first-quarter profit came in at Rs 9,478 crore ($1.19 billion), much below projections of Rs 9,851 crore, according to Refinitiv data, analysts saw signals of a downturn in demand.
ICICI Securities stated in a note that “Although management expects IT spends to be resilient, we see clearly signals of deceleration in demand,” noting slowed hiring, muted transaction growth, and weak performance in Europe.
Advertisement
Operating margin decreased from 25.5 percent a year earlier to 23.1 percent for the quarter.
TCS shares are expected to experience their largest intraday percentage decline in four weeks, with the stock down 12.7 percent as of Friday’s close this year.