TCS shares tank on weak Q3 guidance

NEW DELHI: Shares of TCS fell over 2 per cent in Monday’s trade after the IT firm said the floods in Chennai would have ‘material’ impact on its third quarter results, as one-fifth of the company’s headcount operate from the state.

The company has a total strength of over 320,000 employees.

The stock dropped 2.18 per cent to hit a low of Rs 2,387.25 on BSE. It had hit a 52-week low of Rs 2,316.65 on December 7.

“While the majority of facilities in Chennai were opened for normal business on Monday, December 7, attendance rates were lower than normal, as employees were still recovering from the flood’s aftermath,” TCS said in a statement to investors.

The company had created an operation control centre to ensure infrastructure support for key teams supporting customers wherever needed. It said other than critical activities, normal operations in Chennai remained suspended for a week.

The third quarter is a seasonally weak one for Indian IT firms.

If the impact of Chennai floods is significant, then it would be extremely tough for TCS to beat Nasscom’s growth target of 12 -14 per cent for the year, Economic Times said in a report.