January 11, 2019 / 4:35 AM / 2 months ago

BUZZ-India's Tata Consultancy Services sinks on low EBIT margins

** India’s top software services exporter Tata Consultancy Services Ltd shares fall as much as 2.7 pct to 1,837.15 rupees, lowest since Nov 27

** Stock biggest pct loser on the NSE index, capping index gains by 8.3 index pts

** CLSA analysts said TCS’ margin slipped 90 bps Q-o-Q due to a talent crunch in the United States on strong demand and scarce visa availability

** CLSA cuts TCS PT to 2,460 rupees from 2,500 rupees

** Co posted 24.1 percent rise in qtrly profit on Thursday

** Morgan Stanley said earnings before interest and taxes (EBIT) margin posted by TCS was a negative surprise at 25.6 pct, missing the 26.8 pct it had estimated

** Sees downside risks to margin expectations and raised concerns over the company indicating increasing cost of carrying out business in major markets and higher cost of subcontractors - MS

** Nomura says risks that might impede achievement of the target price for TCS include deterioration in global macro, weaker-than-expected revenue growth, and failure in inorganic initiatives

** Twenty-three of 44 brokerages rate the stock “buy” or higher, 14 “hold” and seven “sell” or lower; their median PT is 2,116 rupees

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