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Why is TCS Stock Falling? | Yadnya Investment Academy

Why was TCS Stock Falling Yesterday? | Yadnya Investment Academy

Published on 14 April 2021

Despite announcing noticeable quarterly results for Q4FY21 on Monday 12th April 2021, shares of TCS tumbled by 4.39% on 13th April and closed at Rs 3,104.05 on NSE. So, what were the reasons behind this fall in TCS share price? Let’s have a quick read!

Introduction:  TCS Share Analysis

TCS fell by 4.39% on the single-day trading to Rs. 3,104.5 just the next day of the announcement of the Q4FY21 Results. The fall in the stock prices of the leader in the IT sector also led to the collapse of the IT Index. Nifty IT was down by 3.28% and ended up at 25,58.30 on 13th April 2021.

The primary concerns highlighted in the market on 13th April 2021 were whether TCS would continuously post good results in upcoming periods.

Q4FY21 Highlights: TCS Share Annual Report

  • TCS revenue for Q4FY21 stood at Rs. 43,705 Cr. accounting for the growth of 4% quarterly and YoY growth of 9.4%.

  • TCS has posted an Operating Profit Margin of 26.8% in Q4FY21, their all-time high. OPM of the company is up by 0.2% from last quarter and has increased by 1.7% from the OPM of Q4FY20.

  • The company’s net income has increased by around 14.9% from Q3FY21 revenue and currently stands at Rs. 9,246 Cr.

  • The net Interest Margin of the company in Q4FY21 is 21.2%.

Market Concerns for TCS:

i) Will TCS be able to sustain the Operating Profit Margin (OPM) levels of 26.8% in other quarters as well.

ii) Also Will TCS maintain the Net Profit Margin of 20.8% in upcoming quarters.

iii) Will TCS be able to grow at the rate of 10%-15% from this level.

Conclusion:  TCS Share Quarterly Results

From the Company's viewpoint, TCS is an excellent company with great earning visibility. Here again, the Growth view of the company is another question raised by the market. Considering this market concern regarding TCS, Its valuation might be rationalised and may come near their 3-year, 5-year Median Average PE.

 

 

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