India's TCS warns financial clients delaying spending, shares slide
- AT&T (T) to Acquire Time Warner (TWX) for $107.50/Share
- Rockwell Collins (COL) in Advanced Talks to Acquire B/E Aerospace (BEAV) - WSJ
- Top 10 News for 10/17 - 10/21: Merger Rumors Abound; CEOs Depart; Tesla Kicks Autopilot Up A Notch
- Wall Street ends little changed; Microsoft hits record
- AT&T (T) in Advanced Talks to Acquire Time Warner (TWX) - DJ
News and research before you hear about it on CNBC and others. Claim your 2-week free trial to StreetInsider Premium here.
MUMBAI (Reuters) - India's Tata Consultancy Services Ltd (NYSE: TCS) (TCS) has warned that its financial sector clients in the United States are holding back on discretionary spending, sending its shares tumbling as much as 6.4 percent to a six-month low.
The country's top software services exporter said its internal data as of end-August indicated that banking and financial services clients were being cautious and have in some cases been holding back on discretionary spending.
This has led to a "sequential loss of momentum", TCS said in a securities filing late on Wednesday.
The United States is the biggest market for India's more than $150 billion software outsourcing sector, followed by Europe.
Brokerage firm Ambit said lower revenue growth and adverse exchange rate movements would likely hurt the profitability of TCS.
It estimated revenue to grow 1-2 percent on quarter in the three months to September, lower than the 3 percent rise reported for the first quarter.
IDFC Securities said in a note that it expected "downward risk" to the company's margin guidance of 26-28 percent after the warning.
The brokerage cut its earnings estimate for TCS for the next fiscal year by 3-4 percent due to the operational challenges.
As of 0545 GMT, TCS shares were down 5.7 percent at 2,302.20 rupees after declining to their lowest since March 2 at 2,284.75 rupees. [nL3N1BK21Y]
(Reporting by Sankalp Phartiyal; Editing by Subhranshu Sahu)
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- Stifel Upgrades PayPal (PYPL) to Buy Following 'Solid' Q3 Results
- Genesee & Wyoming (GWR) Ratings Affirmed at Moody's Amid Planned Glencore Acquisition
- Oppenheimer Reiterates Outperform on Microsoft (MSFT) Following Strong 1Q Report
Create E-mail Alert Related CategoriesReuters
Sign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!