IT stocks slide after disappointing Q4 earnings from TCS

Shares of eight IT firms fell 1.41% to 5.21% at 13:13 IST on BSE after disappointing Q4 March 2015 results from software major TCS after market hours yesterday, 16 April 2015.

Meanwhile, the S&P BSE Sensex was down 125.61 points or 0.44% at 28,540.43.

CMC (down 3.77%), Tech Mahindra (down 2.38%), Wipro (down 2.34%), Persistent Systems (down 1.75%), HCL Technologies (down 1.41%), and MphasiS (down 1.41%) edged lower.

TCS fell 4.08% at Rs 2,479.60. TCS' consolidated net profit excluding one time special employee reward rose 8.35% to Rs 5773 crore on 1.14% decline in income from operations to Rs 24220 crore in Q4 March 2015 over Q3 December 2014. TCS' bottom line during the quarter was boosted by 76.39% surge in other income to Rs 1136 crore in Q4 March 2015 over Q3 December 2014. The result was announced after market hours yesterday, 16 April 2015.

TCS' reported net profit during the quarter fell sharply due to one time special employee reward of Rs 2628 crore in Q4 March 2015. Consolidated net profit dropped 30.31% to Rs 3713 crore in Q4 March 2015 over Q3 December 2014. TCS said that it will pay employees a special reward or one-time bonus to mark the 10th anniversary of the company's initial public offering in 2004. For the company, the total consideration for this special reward to employees will be Rs 2628 crore.

Looking forward to financial year (FY) 2015-16, CEO and MD of TCS N. Chandrasekaran said that the company's investments in platforms, digital and automation are gaining traction with clients and together with its market investments in USA, Europe and Japan, the company is upbeat that the coming quarters will bring more opportunities for TCS to partner with customers across multiple industries.

TCS said that the board of directors of the company at its meeting held on 16 April 2015 has recommended a final dividend of Rs 24 per share for the year ended 31 March 2015 (FY 2015).

MindTree fell 5.21% at Rs 1,318.80. On a consolidated basis, MindTree's net profit rose 8.6% to Rs 128.70 crore on 0.7% rise in revenue to Rs 918.10 crore in Q4 March 2015 over Q3 December 2014. The result was announced after market hours yesterday, 16 April 2015. MindTree's net profit rose 19% to Rs 536.30 crore on 17.5% increase in revenue to Rs 3561.90 crore in the year ended March 2015 over the year ended March 2014.

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