TCS stocks slip as Q1 margins slip

Shares of India’s top software services exporter Tata Consultancy Services Ltd fall as much as 2.9 per cent to an over six-week low of ₹2,071.3. At 10.20 am, the stocks of TCS were trading 1.62 per cent lower at ₹2,097.

On Tuesday, TCS posted a near 11 per cent rise in first quarter profit but flagged stress in global capital markets. Margins fall to 24.2 per cent from 25 per cent a year earlier. TCS is looking to maintain its revenue growth rate at ”double-digits,” said Chief Executive Officer Rajesh Gopinathan, adding, “I’m really not looking for acceleration.”

Jefferies analysts said TCS’ EBIT margin was 30bps below their estimate and was down 90bps QoQ due to wage hikes and rupee appreciation. It cut price target to ₹2,380 rupees ($34.72) from ₹2,400.