TCS share price slips 1% after S&P revises outlook to stable from positive

TCS share price slips 1% after S&P revises outlook to stable from positive

Following the update, shares of Tata Consultancy Services opened with a loss of 1.1.% and touched an intraday low of Rs 2,217.05 on BSE against their earlier close of Rs 2,242.25

TCS stock price is trading higher than 50, 100 and 200-day but lower than 5 and 20-day moving averages

Shares of Mumbai-based IT services giant Tata Consultancy Services (TCS) were trading lower in Wednesday's opening trade after S&P Global Ratings revised its outlook for the IT major to stable from positive given the subdued global IT spending estimates.

"We are revising our outlook on TCS to stable from positive. At the same time, we affirmed our 'A' long-term issuer credit rating on the company," S&P Global Ratings said.

Following the update, shares of Tata Consultancy Services opened with a loss of 1.1.% and touched an intraday low of Rs 2,217.05 on BSE against their earlier close of Rs 2,242.25.

However, backed by a positive momentum in broader indices Sensex and Nifty, the index heavyweight stock recovered losses and touched an intraday high of Rs 2242.25 today. Tata Consultancy Services stock has gained after 5 days of consecutive fall.

TCS stock price is trading higher than 50, 100 and 200-day but lower than 5 and 20-day moving averages.

TCS shares have risen 4.25% in a month. Market capitalisation of the firm stood at Rs 8,43,817 crore as of today's session. Currently, TCS stock trades 4.76% away from 52 week high of Rs 2,357.15.

"The stable outlook reflects our view that TCS will maintain its good competitive position, robust cash holdings, and strong operating cash flows over the next 12-24 months. We also expect the company to pursue conservative financial policies toward acquisitions and shareholder distributions," S&P Global said.

"TCS' revenue growth and profitability over the next 12-18 months will be weaker than we earlier anticipated. We estimate global IT spending will contract by 4% in 2020, in line with our expectation of a 3.8% decline in global GDP because of the COVID-19 pandemic. We now expect TCS' revenue to rise 0%-1% in the fiscal year ending March 31, 2021, compared with growth of 5.3% in fiscal 2020," the Singapore-based rating agency said.

It expects TCS to benefit from its good market position, service delivery capabilities and leverage client relationships to tap on demand for emerging areas of digital and workplace solutions to mitigate the weaknesses, the rating agencysaid adding that an upgrade would require TCS to improve its business mix from new-age digital services while maintaining its strong profitability at around 30%.

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