The Hindu Business Line : TCS sees biggest one-day fall since its listing

Mumbai, April 22 The below expected quarterly results of the country’s biggest computer services provider, Tata Consultancy Services (TCS), sent the BSE IT Index down 178 points or 4.32 per cent. Technology stocks were the worst hit on the bourses today. TCS plunged 10.63 per cent, Infosys slipped 2.81 per cent, Satyam shed 5.03 per cent and Wipro fell 5.06 per cent.

“The results of TCS had a rub-on effect on Satyam, Wipro and Infosys. Which is why we saw a dip in the prices of these scrips as well,” said Mr Harit Shah, IT and Telecom analyst at Angel Broking. These were also the worst performing stocks among the bluechips on the BSE today. Other IT stocks that took a beating today were Patni (3.02 per cent), NIIT Technologies (5.77 per cent) and Tech Mahindra (4.05 per cent).

Muted Growth

Almost 11 per cent dip witnessed in the TCS share price today was its highest fall in percentage terms, since its trading debut on August 2004.

TCS share price lost Rs 105.50 from its previous close to end the day at Rs 887.07. The scrip touched an intra-day high of Rs 969 and an intra-day low of Rs 881.15.

Marketmen say that below expected quarter results and rating cuts led to the dip in share price of TCS. The company reported a muted growth of 4.15 per cent in its net profit for the fourth quarter, which was its slowest quarterly growth in the last one year.

According to a research report by Emkay Share and Stock Brokers Ltd, TCS’s revenues at Rs 6,095 crore were much below their expectations.

It also stated that apart from the subdued performance from the international business, revenues from the domestic business also remained muted at 1.2 per cent sequential growth.

The report also stated that TCS has reported the weakest set of numbers among peers such as Infosys, Satyam and Wipro. Goldman Sachs Group Inc and Morgan Stanley have also cut their rating on the stock.

Booking profits

According to Mr Sanjay Someshwar, a sub-broker with Ventura Securities, investors are booking profits.

“When the markets were at the 15300 levels, people started buying IT and pharma stocks, as a defensive bet, which pushed up the prices of those stocks.

Now, investors who had entered at that time are booking profits. And also things in the US are not encouraging, which is a bad news for our IT industry,” said Mr Someshwar.

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