TCS tumbles on weak Q4 outlook

TCS fell 4.83% to Rs 2020 at 9:33 IST on BSE after the company in an analyst meet on Tuesday, 18 March 2014, reportedly said that growth in Q4 March 2014 is likely to be subdued.

Meanwhile, the BSE Sensex was down 20.80 points, or 0.10%, to 21,811.81.

On BSE, so far 77,000 shares were traded in the counter, compared with an average volume of 1.03 lakh shares in the past one quarter.

The stock hit a high of Rs 2,078 and a low of Rs 2,019 so far during the day. The stock hit a record high of Rs 2,384.20 on 14 January 2014. The stock hit a 52-week low of Rs 1,364 on 30 April 2013.

The stock had underperformed the market over the past one month till 18 March 2014, sliding 2.01% compared with the Sensex's 5.81% rise. The scrip had also underperformed the market in past one quarter, rising 3.32% as against Sensex's 4.66% rise.

The large-cap IT company has an equity capital of Rs 195.87 crore. Face value per share is Re 1.

TCS said in a meeting with analysts on Tuesday, 18 March 2014, that it expects a weak fourth quarter. According to reports, TCS has based its comments on potential impact from seasonally slower demand in its biggest markets and continued demand volatility in Indian market. However, the company indicated that it expects its revenue growth next financial year to exceed that of the industry.

The analyst meeting was addressed by TCS finance chief Rajesh Gopinathan. TCS reportedly said growth in January-March 2014 would be lower than in the preceding quarter and margin would decline 40-50 basis points on cross currency movement and higher investments. The company reportedly added that long-term margin expectations were unchanged and so was commentary for fiscal 2015.

TCS, which generates about 17-18% of its overall revenue from emerging markets such as India, reportedly said it expected revenue from India to decline in the March quarter and remain under pressure in the near term following uncertainty during an election year that is delaying many projects.

On a consolidated basis, TCS reported 15.1% rise in net profit to Rs 5333 crore on 1.5% increase in revenue to Rs 21294 crore in Q3 December 2013 over Q2 September 2013.

TCS is an IT services, consulting and business solutions organization. TCS offers a consulting-led, integrated portfolio of IT, BPS, infrastructure, engineering and assurance services.

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