BackTCS declines 4% as IT stocks drop on growth warning
In intra-day trading on Monday, TCS touched a low of Rs2,356.45a level last seen on 17 July
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Mumbai: Shares of Indian information technology (IT) companies fell on Monday, with Tata Consultancy Services Ltd (TCS) dropping as much as 4.04%, the sharpest decline since 17 October, after the company told analysts it expects weak third quarter sales.
In intra-day trading on Monday, TCS touched a low of ₹ 2,356.45—a level last seen on 17 July. Since 1 December, the stock has fallen 10.7% even as the benchmark BSE Sensex fell 5.1%.
The company told analysts that growth is likely to be similar to what it had achieved in the year-ago December quarter when revenue had grown by a little over 2% in constant-currency terms. This time around, adverse cross-currency movements are expected to affect dollar revenue growth by about 220 basis points. The upshot: reported dollar revenue growth is likely to be next to nothing. One basis point is one-hundredth of a percentage point.
The firm said the banking and financial services sector continues to face weakness, especially in the insurance segment and in banking products. Besides, revenues from the retail, manufacturing and hi-tech industries are expected to take the yearly impact of holidays and furloughs, the report added.
Among other IT companies, Wipro Ltd fell 3.2% to ₹ 526.20, HCL Technologies Ltd was down 2.8% to ₹ 1,469.50, Tech Mahindra Ltd 2% to ₹ 2,539, Mindtree Ltd 1.8% to ₹ 1,173.85 and Infosys Ltd 1.4% to ₹ 1,912.
The BSE IT Index fell 2.3% to 10,058.38, while the Sensex fell 0.3% to 27,259.64 points.
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