TCS slumps on weak Q3 outlook

TCS is amongst the top weak scrips on the bourses today. The stock is obviously reacting to the Investor/Analyst meet held on Friday, wherein, it warned that Q3 revenue growth could get weaker due to seasonality pressure and pressure in the Banking, Financial Services and Insurance (BFSI) business. The company said that the mood was more upbeat at the beginning of 201 than what it is now.

Though TCS maintained its operating margin guidance to remain at 26-28%, it expects a fall of around 220 bps in dollar revenue due to cross currency headwinds. This is similar to what Mindtree had announced a couple of days ago that it expects an impact of 100-50 bps on dollar revenue due to cross currency issues.

The stock, from a close of Rs.2455.70 on Friday, opened weak at Rs.2393.80, going down further to 2356.45. It has recouped a bit since then and is now 3.7% down at 2367 levels.