Tata Consultancy Services, India's top software exporter, slumped to a 2-month low and fell for the 4th day after its first quarter sales, reported after markets closed on Thursday, missed some analysts' projections.
TCS fell 2.6 percent to 2,455 rupees on the
National Stock Exchange. It hit its lowest level since May 7th and the stock slumped below its crucial 200-day moving average, which is a short-term bearish indicator. TCS was also the top traded future in the derivatives market with nearly 40,000 contracts changing hands. The stock has slumped 5.3 percent over the past 3 months compared with the 12 percent fall on the
BSE IT Index.
TCS failed to meet sales forecast for the fourth time in a row. Q1 Sales rose 6 percent sequentially to 25,668 crore rupees, below analysts expectations.
Net Profit fell 3.3 percent sequentially to 5,709 crore rupees. The software giant's attrition rate surged to 15.9 percent. But major global brokerages remain optimistic on TCS's futures growth and they maintain their `Buy' stance on the stock.
CLSA said it saw strong margin performance at TCS emanating from productivity gains.
Barclays added it continued to see strength in execution at TCS which should lead to industry leading sales growth.
Credit Suisse continues to view TCS as a core holding despite near term stock constraints.
Morgan Stanley said it sees strong deal wins and broad-based growth rates across verticals.
And
Goldman Sachs said it believes TCS’ earnings visibility justifies 20% premium.
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