Tata Consultancy Services’ (TCS) share price was down nearly 1% on Monday after lukewarm financial results dampened investor sentiment towards the Tata stock and other IT firms. Comments from CEO K Krithivasan about slow growth further added to the downtrend in the stock.
What Happened: The Indian IT giant is anticipating modest growth, Krithivasan, who assumed office in June, said in an interview with Economic Times. Facing two consecutive quarters of subdued performance and a seasonally weak quarter ahead, TCS expects possibly one of its slowest growth phases on record.
Krithivasan said the growth pace depends largely on client sentiments and the industry outlook. While TCS has secured significant deals, its first-half performance suggests that the upcoming fiscal year will witness only modest single-digit growth.
Further Changes: To navigate these challenges, TCS is restructuring to improve its client focus, he added. The company aims to offer high-quality services to both large and small clients across various sectors, aligning itself with clients’ preferences and needs. This restructuring has been well-received, simplifying the process of offering the best solutions to clients.
Krithivasan said TCS has ensured business continuity during events like the Israel-Gaza conflict, emphasizing the safety of its associates, though the direct impact on TCS’s business from the region will likely be limited to risks from oil price hikes and inflation.
Get all the latest Share Market trends and news to set you up for the week ahead.
Shareholder Returns To Stay Strong: Krithivasan said TCS will continue shareholder-friendly returns between 80% and 100% of free cash flow to shareholders through dividends and buybacks based on performance.
Regarding the investigation into preferential treatment given to recruitment firms by TCS RMG, Krithivasan said the investigation concluded with actions taken against 19 employees for violating the code of conduct. He also added that TCS had taken measures to prevent such incidents in the future, ensuring business practices remain fair and transparent.
Price Action: TCS’ share price was down 0.92% at ₹3,537.85 around noon on Monday.
© 2023 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.