TCS shares fall the most since Trump win as CEO Chandrasekaran exits

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Mumbai: Shares of Tata Consultancy Services Ltd (TCS) tumbled 3.9% on Friday, posting their biggest decline since 9 November, as the exit of CEO N. Chandrasekaran to head the holding firm Tata Sons overshadowed largely in-line December quarter earnings

TCS named its chief financial officer Rajesh Gopinathan to succeed Chandrasekaran (popularly known as Chandra) as CEO.

On Friday, TCS shares closed 3.9% lower at Rs2,252 apiece on the BSE. In comparison, the BSE IT index shed 1.9%, while the 30-share Sensex closed flat.

The plunge shaved of Rs17,990 crore from the market capitalization of India’s most-valued firm.

For Mumbai-headquartered TCS, the protracted period of subpar growth continued as India’s largest technology outsourcing firm reported a 0.3% dollar revenue growth, marginally higher than street expectations, in the October-December period.

“…major management changes with current CEO being elevated to group chairman and replaced by current CFO overshadowed the results and could keep the stock under pressure until growth/margins improve,” Jefferies India Pvt. Ltd said in a note.

To be sure, the sentiment for the entire $150 billion Indian IT sector has been less than cheery in light of major clients in US and Europe holding back expenditure, as they wait for policy changes that could be announced by US president-elect Donald Trump when he takes charge, and as UK’s Brexit decision nears implementation.

On Friday, rival Infosys Ltd shed 2.49% after the country’s second largest software services exporter reported a 1.4% decline in dollar revenue in the third quarter and cut its full-year growth guidance for the third straight time in the current financial year.

In a note on Friday, Reliance Securities said that at a time of multiple challenges and headwinds impacting the IT sector, it was not a wise decision to rock the boat for TCS, considering Chandrasekaran’s vast expertise as CEO and board-level connect with major clients.

“Though we realize this is a strategic decision taken with a view to stabilizing the turbulent waters at the group level, we remain concerned about the consequential impact on TCS,” Reliance Securities said in the note.