TCS slips over 4% post Q4 results, below 200-DMA; top Sensex, Nifty loser - Economic Times

NEW DELHI: Tata Consultancy Services Ltd (TCS) slipped as much as 4.35 per cent and was trading below its 200-DMA in trade on the Bombay Stock Exchange, after the IT major reported a net profit of Rs 5,773 crore, up 8.4 per cent, Quarter-on-Quarter against ET Now poll estimate of Rs 5,396.3 crore.

TCS was also the top percentage loser on both Sensex and Nifty. It plunged as much as 4.3 per cent on the NSE to hit its lowest level since February 2015 of Rs 2470.

However, adjusted net profit after one-time bonus to employees of Rs 2628 crore is at Rs 3712.7 crore. Revenue in rupee terms increased to Rs 24219.8 crore, while in dollar terms it came at $3900 million.

TCS revenues took a hit of nearly 1 per cent per cent in the quarter on account of cross currency movements.

Volume growth was disappointing at 1.42 per cent, Q-o-Q against Street expectation of 2.5 per cent. The EBIT margin in Q4 stood at 27.2 per cent; post staff bonus is stands at 16.4 per cent.

At 10:00 a.m.; TCS was trading 4.07 per cent lower at Rs 2478. It hit a low of Rs 2472.50 and a high of Rs 2561 in trade today.

"Tata Consultancy Services Q4FY15 results were mixed bag. Revenue was below PLe/Consensus expectation, but, margin (after adjusting for employee bonus of $423m) was ahead of expectation. TCS missed expectations in five out of last six quarters," said Prabhudas Lilladher report.

"The weakness was attributed to disappointment in Telecom, Insurance and Energy. Management continues to hold its positive view on demand environment and IT budget. We expect near-term weakness in stock price as consensus expectations moderate," the report added.

Value Buy?

Investors with a long term horizon of more than 1 year should use dips to accumulate the stock, say experts. Traders can go long in the range of 2550 - 2520 with stoploss of 2430 on closing basis. On the higher side, the stock can test the all-time high of 2839, say experts.

"We believe that negative factors are already factored into the current prices, and even a disappointing result, if any, and subsequent sharp fall shall only provide an opportunity to go long," says Mazhar Mohammad, Chief Strategist - Technical Research & Trading Advisory, Chartviewindia.in.

Since the all-time high of Rs 2839, made in Oct 2014, TCS has been trading broadly in a range bound manner. It has been oscillating about its crucial daily and weekly Moving Averages.

"In terms of price patterns, the entire trading range has taken form of a multi month triangular pattern. Currently, last leg of the pattern is afoot. To complete the pattern the stock can come down till 2550-2520," says Gaurav S. Ratnaparkhi, Technical Analyst at Sharekhan.

"Near those levels traders & investors can look to enter into the counter, as one can expect short term as well as medium term reversal from those levels," he adds.

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