Tata Consultancy Services (TCS) on Wednesday 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 dipped 1.12 to Rs 2,217.05 on the BSE. On the NSE, 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 by four 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.