Shares of software major TCS fell by nearly 8 per cent on the bourses today after the company reported a 6.1 per cent jump in profit for the September quarter, below market expectations.
The company’s stock started the day on a weak note and then slid further by 7.80 per cent to an early low of Rs 1,032.35 on BSE.
On the National Stock Exchange, TCS shed 7.64 per cent to an early low of Rs 1,034.65.
TCS yesterday reported a 6.1 per cent growth in consolidated net profit to Rs 2,301 crore for the second quarter ended September 30, 2011.
The company had posted a net profit of Rs 2,169.21 crore for the July-September quarter last year.
“TCS’s results failed to live up to the street’s expectations in our view,” Emkay Global Financial Services said in a research note.
Echoing a similar view, Angel Broking said in a research note, “TCS’s Q2, FY’12, numbers were lower than the street’s expectation.”
“Institutional holding in the stock is very high, so any kind of negative news impacts the scrip badly. The company’s result failed to cheer the market, as margins and profitability were low,” Ashika Stock Brokers Research Head, Mr Paras Bothra, said.
However, another brokerage firm, Prabhudas Lilladher, said, “TCS Q2, FY’12, results were in line with our expectations, but lower than consensus estimates.”
The lower-than-expected performance was due to slower growth in Latin America, it added.