TCS lowers outlook for Q2FY17; drags shares of top 4 IT cos

The shares of Tata Consultancy Services dipped nearly 6% on Thursday after the company announced the possible loss of momentum in Banking and Financial Services Solution (BFSI) in the US. 

At 1303 hours, the shares of the company were trading at Rs 2309.55 per piece, down 5.62%, or Rs 137.45 on BSE.

"Based on data at the end of August 2016, the company has characterized customer outlook as one marked by abundant caution, with some holding back of discretionary spending- particularly in the BFSI vertical in the US- resulting in a sequential loss of momentum", the company said in a regulatory filing.

The company cautioned the investors on its business trends in the second quarter of this fiscal.

TCS is not the only IT company which has lowered its financial outlook for the quarter ending on September 30.

On Tuesday, global IT consultancy firm, Mindtree, also lowered its financial expectations. 

The company has said, "The decline is expected due to cross-currency movements, project cancellations and slower ramp-ups in a few large clients across different verticals and continued weakness in its UK-based subsidiary Bluefin".

Along with revenue, the company expected margins to decline with a dip in EBITDA margins in this quarter as against Q1FY17.  

Following the news, the stocks of other IT firms came under pressure.

At 1314 hours, the shares of Infosys was trading at Rs 1035.25 per piece, down 1.87%, or Rs 19.75.

At the same time, the shares of Wipro was trading at Rs 473.25 per piece, down 1.85%, or Rs 8.90 on BSE.

The shares of HCL Tech was trading at Rs 771.15 per piece, down 2%, or Rs 15.75 on BSE.

And, the shares of Tech Mahindra were trading at Rs 460 per piece, down 2.38%, or Rs 11.20 on BSE.

Combined the loss of these top five IT companies, they have lost about Rs 40,000 crore of market capitalisation today, The Economic Times report said.