India's TCS shares dip on US bank spending cutbacks
08 September 2016 | 4305 views | 0
Shares in Indian outsourcing giant Tata Consultancy Services (TCS) dipped to a six month low after the firm warned that American financial sector clients are holding back on discretionary spending.
In a securities filing, the company says that its internal data shows FS clients are being cautious with their money.
"Based on data at the end of August 2016, the company has characterised customer outlook as one marked by abundant caution, with some holding back of discretionary spending- particularly in the BFSI vertical in the United States - resulting in a sequential loss of momentum," says the filing.
The warning saw shares fall as much as 6.4% before recovering slightly, closing down 5.1% at Rs2321.15.
Analyst house IDFC Securities responded by saying that it expects "downward risk" to TCS's margin guidance of 26% to 28%.