TCS shares erase early losses; close nearly 1 pc higher

In the morning trade, stock declined over 1 per cent after S&P Global Ratings said the company is likely to face slower growth in revenue and profitability over the next 12-18 months, given subdued global IT spending. The stock, which dipped 1.12 per cent to Rs 2,217.05 on the BSE during the day, witnessed fag-end recovery and closed at Rs 2,254.65, a gain of 0.55 per cent.

Shares of Tata Consultancy Services (TCS) on Wednesday erased early losses and closed nearly 1 per cent higher. In the morning trade, stock declined over 1 per cent after S&P Global Ratings said the company is likely to face slower growth in revenue and profitability over the next 12-18 months, given subdued global IT spending.

The stock, which dipped 1.12 per cent to Rs 2,217.05 on the BSE during the day, witnessed fag-end recovery and closed at Rs 2,254.65, a gain of 0.55 per cent. On the NSE, it closed 0.59 per cent higher at Rs 2,256. During the day, it fell 1.16 per cent to Rs 2,216.45.

"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 in a statement on Tuesday. It added that the stable outlook reflects its view that TCS will maintain its good competitive position, robust cash holdings, and strong operating cash flows over the next 12-24 months.

The Mumbai-based IT major's robust cash position and prudent financial policies will continue to support its financial position, it said. S&P Global Ratings estimated that global IT spending will contract 4 per cent in 2020, in line with its expectation of a 3.8 per cent decline in global GDP because of the COVID-19 pandemic.

"We now expect TCS' revenue to rise 0-1 per cent in the fiscal year ending March 31, 2021, compared with growth of 5.3 per cent in fiscal 2020," it added.