TCS hits fresh 18-month low post Q3 numbers

The stock was down 2% at Rs 2,285, its lowest level since June 2014 on the BSE.

Shares of Tata Consultancy Services (TCS) were hit fresh 18-month low of Rs 2,285, down 2% on the BSE, after the company for the sixth quarter in a row misses the Street’s revenue estimates during the third quarter ended December 31, 2015 (Q3FY16).

TCS reported 12.2% year-on-year (y-o-y) growth in consolidated net profit at Rs 6,110 crore for Q3FY16. The revenue grew 11.7% at Rs 27,364 crore on a y-o-y basis. On sequential basis, net profit grew by 0.90%, while revenues up 0.73%. CLICK HERE TO READ FULL REPORT.

The company posted a 0.3% sequential de-growth in USD revenues to US$ 4,145 million. On, constant currency terms (CC), it reported a qoq growth of 0.5%, mainly impacted on back of the Indian business.

In past three months, the stock has underperformed the market by falling 12% as compared to 7% decline in the S&P BSE Sensex.

According to Angel Broking, the stock has witnessed a strong underperformance amongst its peers. After the underperformance the company currently trades at a very attractive level of 16.2xFY2017E earnings, which we believe given the return on equity (ROE) of the company which is around +35%, is very attractive.

Hence current weakness should be utilized by the investors to get into the stock with a long term view, as the business demand and order inflow remains intact and the company is confident of maintain its profitability, which has been the case, the broking firm said in a client note.

At 09:57 a.m. the stock was down 1.5% at Rs 2,289 as compared to 0.89% rise in the benchmark index. A combined 807,170 shares changed hands on the counter on the NSE and BSE so far.