Shares of Tata Consultancy Services (TCS) closed at a 3-month low on the BSE after the company told analysts it expects the earnings in Q4 to be weak. The scrip closed 3.84% lower at Rs 2040.95 after falling more than 5% intraday on Wednesday.
However, analysts retain their positive view on the scrip. "TCS stock has modestly underperformed the broader markets recently (approximately 6% YTD) and currently trades at approximately 18x FY15E EPS. We see upside to our estimates if the global economy gathers momentum, and expect TCS’ valuations to inch closer to previous business cycle peak," IDFC Institutional Securities said in a note.
TCS' weak earnings outlook put pressure on other IT stocks. Infosys (-2.32%), Tech Mahindra Ltd (-1.03%), Mphasis (-2.55%) and HCL Technologies (-0.75%) ended lower. Among sectoral indices, the BSE IT index (-2.24%) was the biggest loser.