TCS stock tumbles 5% on weak revenue growth outlook

TCS stock tumbles 5% on weak revenue growth outlook

Stock in Tata Consultancy Services (TCS) tumbled as much as 5 per cent in early morning trade on Wednesday after the software services provider announced a low-key outlook for its quarterly revenue growth.

The largest Indian IT outsourcer yesterday announced that its revenue growth in the January-March quarter would likely be weaker than that of the October-December quarter.

Kotak Institutional Equities said in a note, "We are disappointed by the muted outlook for the quarter and expect constant currency revenue growth of around 2 per cent, down from our 3 per cent estimate earlier."

Basudeb Banerjee of Quant Broking said the combination of more holidays in the quarter and persistent slowdown in government expenditure in the IT field weighed on TCS revenues in the fourth quarter. He pegged growth in TCS' March quarter revenues at 2.6-2.8 per cent.

TCS' weak revenue growth outlook came just a few days after a similar warning from Infosys.

At 09.40 a. m. today, TCS stock was trading down 4.8 per cent at Rs 2020 a share. The stock was the biggest loser at Nifty. Other IT stocks also suffered declines. While Wipro stock fell 2.1 per cent, Infosys traded 2.7 per cent lower.

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