India’s TCS hits three-week low after first quarter shortfall
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BENGALURU — Shares of Tata Consultancy Services Ltd fell 4.6% to a three-week low on Monday after the major Indian IT firm missed quarterly profit estimates on rising employee-related spending.
Analysts pointed to signs of slowing demand after the IT services exporter said on Friday first-quarter profit was 94.78 billion rupees ($1.19 billion), well below estimates of 98.51 billion rupees, according to Refinitiv data.
“While management expects tech spending to be resilient, we are seeing clear signs of moderating demand,” ICICI Securities said in a note, citing slowing hiring, moderate deal growth and weak momentum in Europe.
The operating margin for the quarter fell to 23.1% from 25.5% a year earlier.
Shares of TCS, which are down 12.7% through Friday’s close this year, are also expected to see their biggest intraday percentage decline in four weeks. ($1 = 79.3225 Indian rupees) (Reporting by Nishit Navin in Bengaluru; Editing by Rashmi Aich)