Bangalore: K Shares Tata Consultancy Services Ltd fell as much as 4.8% on Monday to a three-week low, after the top IT services provider missed its first-quarter profit estimates on a rise in employee-related expenses.
TCS Net profit of Rs 94.78 billion ($1.19 billion) was reported on Friday, according to Refinitiv data, well below the average analyst estimate of Rs 98.51 billion.
Operating margin fell to 23.1% from 25.5% a year ago, mainly due to increased annual salary increases, increased costs of managing talent churns and gradually normalizing travel expenses.
TCS Chief Executive Officer Rajesh Gopinath said the deal pipeline and closures remain strong, but the company remains cautious in view of global uncertainties.
“While management expects technology spending to be resilient, we are seeing clear signs of a slowdown in demand,” ICICI Securities said in a note.
TCS indicated that attribution continued to grow, but its net hiring stood at 14,136 during the June quarter.
Jefferies analysts said in a note, “While management seemed confident on the demand outlook, a greater reliance on subcontracting with lower net hiring (seven-quarter low) indicates that the company is preparing for an uncertain macro environment.” Is.”
Several analysts also voiced concerns over the order book for the quarter, which stood at $8.2 billion, up 1.2% from a year ago.
TCS was the first among its domestic peers to report earnings, with investors looking for outlook for the sector, which has shown a stellar performance over the past few years, with companies expanding their digital offerings during the pandemic. Huh.
TCS weighed in on the Nifty IT index, which was down 3.1%, apart from the bluechip Nifty 50 index pulling 0.5%.
tcs share The Nifty IT index has lost 16.4 per cent so far this year as against 29.2% fall.
TCS Net profit of Rs 94.78 billion ($1.19 billion) was reported on Friday, according to Refinitiv data, well below the average analyst estimate of Rs 98.51 billion.
Operating margin fell to 23.1% from 25.5% a year ago, mainly due to increased annual salary increases, increased costs of managing talent churns and gradually normalizing travel expenses.
TCS Chief Executive Officer Rajesh Gopinath said the deal pipeline and closures remain strong, but the company remains cautious in view of global uncertainties.
“While management expects technology spending to be resilient, we are seeing clear signs of a slowdown in demand,” ICICI Securities said in a note.
TCS indicated that attribution continued to grow, but its net hiring stood at 14,136 during the June quarter.
Jefferies analysts said in a note, “While management seemed confident on the demand outlook, a greater reliance on subcontracting with lower net hiring (seven-quarter low) indicates that the company is preparing for an uncertain macro environment.” Is.”
Several analysts also voiced concerns over the order book for the quarter, which stood at $8.2 billion, up 1.2% from a year ago.
TCS was the first among its domestic peers to report earnings, with investors looking for outlook for the sector, which has shown a stellar performance over the past few years, with companies expanding their digital offerings during the pandemic. Huh.
TCS weighed in on the Nifty IT index, which was down 3.1%, apart from the bluechip Nifty 50 index pulling 0.5%.
tcs share The Nifty IT index has lost 16.4 per cent so far this year as against 29.2% fall.