Shares of country's largest information technology (IT) company, Tata Consultancy Services (TCS), fell nearly 3 per cent to hit an intraday low of Rs 3,230 on the National Stock Exchange a day after it announced its December quarter earnings.
TCS net profit rose 4 per cent sequentially to Rs 10,846 crore in third quarter of current financial year compared with Rs 10,431 crore in the previous quarter which fell short of analysts' expectations. Analysts on an average were expecting the IT giant to report net profit of Rs 11,046 crore, according to Reuters.
Its revenue from operations rose 5.27 per cent to Rs 58,229 crore as against Rs 55,309 crore in the previous quarter. The company registered annual increase of 19.1 per cent and its revenue in constant currency terms grew at 13.5 per cent annually.
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Among major markets, North America and UK led with 15.4 per cent growth; Continental Europe grew by 9.7 per cent. In emerging markets, Latin America grew 14.6 per cent, India grew at 9.1 per cent, Asia Pacific grew 9.5 per cent and Middle East & Africa grew 8.6 per cent, TCS said.
During the quarter TCS' order book stood at $7.8 billion.
Meanwhile, concerns raised by company regarding the challenges it faces for its European business amid high inflation and slowing growth and decline in its workforce added to the selling pressure in TCS stock.
TCS in its earnings release said that its headcount during the quarter declined by 2,197 to 613,964.
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"Headcount reduction happened because of supply side issues as other companies were hiring employees but going ahead their cost will come down as they will hire freshers," said Devang Bhatt, IT analyst at IDBI Capital
"We have assumed lower growth for FY24 compared with FY23 but the company will benefit from digitization and cloud migration going ahead. We have a ‘hold’ rating on the stock for target price of Rs 3,615," Bhatt added.
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