TCS's Earnings Miss See Shares Plunge

TCS’s share price dived back in the green on Wednesday as the company released its earnings result for FY23. The share had closed higher on Wednesday in hopes of a strong Q4-print.

What Happened: India’s biggest IT firm on Wednesday released its financial results for FY23. The company’s results failed to meet market expectations. The company’s revenue from operations at ₹59,162 crore -up around 17% year-over-year- was slightly below consensus estimates of around ₹59,400 crore.

Net profit also came up short of street estimates. The company’s profit after tax stood at ₹11,392 crore, a 14.8% YoY increase, however, consensus estimates were around ₹11,550-₹11,600 crore. The company’s EBIT margin stood at 24.5% lower than street estimates of 25%. The company has also proposed a ₹24/share final divided for FY23.

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Several global analysts were left disappointed with IT giant’s results. JP Morgan maintained its ‘underweight’ rating for the stock with a price target of ₹2,700. The firm attributed the earnings miss in parts to the unexpected crisis in the US.

Nomura also maintained its ‘reduce’ rating for the stock and cut the target price from ₹2,850 to ₹2,830. The firm said the near-term outlook for the stock remains weak. CIti also maintained its ‘sell’ rating for the stock with a price target of ₹3,000. The firm noted that the company’s Q4-print was a miss on all accounts, and added that the company’s current valuation is still high.

Price Action: TCS share price was down 1.30% to trade at ₹3,200 as the markets opened on Thursday.

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