Tech stocks like TCS, HCL Tech and Tech Mahindra were hammered in trade today, as results from biggies TCS and HCL Tech fell below expectations.
Fears over slowdown in global economic growth also led to fresh selling in IT stocks. IT majors in India derive bulk of their income from abroad and stuttering economic growth could pose fresh worries.
TCS was down a huge 7.5 per cent, something that we have not seen in the past. The Tech Mahindra stock was down 6 per cent and HCL Tech lost almost 8 per cent. The Infosys stock was spared as the company has impressed with quarterly numbers for the period ending June 30, 2014.
The company reported net profit of Rs.5,288 crore for second quarter (July-September) of this fiscal, registering an increase of 13.6 percent year-on-year (YoY) and 4.6 percent sequentially under the Indian accounting standard. This was marginally below estimates.
HCL Tech which reported numbers this morning saw profits coming in marginally below estimates.
Analysts say there could be more downside risk to select IT stocks if global growth falls, as almost all of the revenues for Indian IT majors comes from abroad.