BENGALURU — Shares of Tata Consultancy Services Ltd dropped as much as much 4.6% to a three-week low on Monday, after the Indian IT major missed estimates for quarterly profit on rising employee-related expenses.
Analysts flagged signs of a slowdown in demand after the IT services exporter on Friday said first-quarter profit came in at 94.78 billion rupees ($1.19 billion), well below estimates of 98.51 billion rupees, according to Refinitiv data.
“Although management expects tech spends to be resilient, we see clear signs of moderation in demand,” ICICI Securities said in a note, citing slowing hiring, muted deal growth and weak momentum in Europe.
Operating margin for the quarter fell to 23.1% from 25.5% a year earlier.
TCS shares, which are down 12.7% up to Friday’s close this year, are also set for their biggest intraday percentage fall in four weeks. ($1 = 79.3225 Indian rupees) (Reporting by Nishit Navin in Bengaluru; Editing by Rashmi Aich)