Shares of Tata Consultancy Services (TCS) declined after the information technology (IT) major reported a 1.3 per cent sequential drop in net profit for the March quarter, prompting several brokerages to cut their target prices.
The TCS stock fell as much as 1.26 per cent during the day to Rs 3,205 per share.
The shares pared losses to close 0.47 per cent lower at Rs 3,232 apiece, compared to a 1.92 per cent rise in the Nifty 50.
Shares of the company extended losses for a second day on Friday.
The stock has fallen 19.8 per cent this year, compared to a 3.45 per cent fall in the benchmark Nifty50.
The IT giant has lost over Rs 3.2 trillion in market capitalisation so far this year, as the IT pack has lost ground due to growth uncertainties arising from US tariffs.
The TCS stock has been the best performer in the Nifty IT index this year, followed by Wipro, which is down 20.6 per cent.
Nine out of the 13 brokerages that reviewed the company after its fourth-quarter earnings downgraded the stock target price.
Two upgraded it and two others retained their previous target prices, according to Bloomberg data.
Commenting on the Q4 results, Kotak Securities said the company had a muted quarter with weak headline numbers and a margin miss.
A healthy deal momentum (total contract value or TCV) for the second consecutive quarter and better growth in developed markets are the positives.
The brokerage noted that the management was confident in revenue growth recovery, even as unfavourable elements in demand were highlighted in multiple segments.
It added, “We bake in a slowing demand environment and risks to the rupee depreciation, leading to revenue growth and margin cuts.”
Motilal Oswal pointed out that near-term revenue risks remain elevated.
The management expects international markets to perform better in FY26 than in FY25.
However, if the BSNL ramp-down is not replaced, FY26 could see a full-year revenue decline.
They expect the first quarter to show a quarter-on-quarter (Q-o-Q) decline.
TCS delivered a weak fourth quarter, driven by a sequentially lower earnings before interest and taxes (Ebit) margin.
This is despite a decline in Indian business and currency benefit, Citi noted in its report.
Macro uncertainties, a negative outlook for the first half of the financial year, and weak forward-looking indicators have triggered Citi to lower its growth estimates for the whole sector.
The information technology major's net profit slipped 1.3 per cent to Rs 12,224 crore sequentially, missing estimates.
In the third quarter, TCS had posted a net profit of Rs 12,380 crore.
Analysts tracked by Business Standard expected a profit of Rs 12,541.9 crore for the March quarter.
On the revenue front, the company reported a 0.8 per cent increase to Rs 64,479 crore in the March quarter, compared to Rs 63,973 crore in the preceding quarter.
Margins in the fourth quarter fell 30 basis points (bps) sequentially at 24.2 per cent from 24.5 per cent last quarter.
For the full year, net profit came in at Rs 48,553 crore, up 5.8 per cent.
Revenue for FY25 was at Rs 2.55 trillion, up 6 per cent.
The company crossed the $30-billion revenue milestone.
The order book TCV came in at $12.2 billion, compared to $10.2 billion in Q3FY25.
In Q1 and Q2, TCV was at $8.3 billion and $8.6 billion, respectively.
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