Shares of IT major Tata Consultancy Services (TCS) continued to decline on Monday, April 17, following the release of its poor fourth-quarter results last week. The stock fell by 3.7 percent during the day's session.
The stock opened on a negative note of Rs. 3,134.10 per share against the previous close of Rs. 3,188.35 per share on Monday and dropped further to touch an intraday low of Rs. 3,070.25. It was trading at Rs. 3,134, down by 1.72 percent, on the NSE.
The stock touched a 52-week high of Rs. 3,575 on February 16, 2023 and a 52-week low of Rs. 2,868.01 on September 26, 2022, indicating that at the current levels, the stock is trading nearly 9.2 percent above its 52-week low and 12.3 percent below its 52-week high.
The stock has declined over 3 percent in the last five days. Furthermore, the shares of the company have slumped nearly 12 percent in the last one year. However, it has grown over 84 percent in the last five years.
Last week, the IT giant posted a 15% rise in its consolidated net profit for the fourth quarter of the financial year. The company's net profit for the quarter ending March 31 stood at ₹11,392 crore, up from ₹9,926 crore during the same period last year.
Operating revenue for the quarter increased by 17% year-on-year to ₹59,162 crore. However, the company's constant currency (CC) revenue growth was the slowest reported in 11 quarters. In addition, its earnings before interest and taxes (EBIT) margin and US Dollar revenue also missed market expectations.
“With a strong business model, a clean balance sheet and its customer-centric approach, Tata Consultancy Services (TCS) is resilient enough to weather many a storm, despite the short-term downturns. While a slowdown in the US market in the fourth quarter came in as a surprise, deal flows and contract signings are quite high,” said outgoing CEO Rajesh Gopinathan in an interview with Financial Express.
TCS declared a final dividend of ₹24 per share for the fourth quarter of financial year 23, bringing the total payout for the year to ₹115 per share. This is an increase from the ₹43 per share paid out in FY22. The company reported a constant currency growth of 13.7%, or 8.6% in US dollars, for the same period.
Domestic brokerage ICICI Direct has a ‘buy’ call on the stock with a target price of Rs. 3,720.
In other news, the company has announced a 12-15% salary hike for its top-performing employees. The move was made in order to retain its best talent in light of the job market’s slowdown. TCS hopes that this incentive will bring down its current attrition rate of 20% to 13-14% in the second half of the fiscal year.
According to a Mintgenie poll, 42 analysts on an average have a 'HOLD' call on the stock.