The stock of country's largest software services firm TCS hit a 6-month low, dragging other IT stocks, after the management on Thursday said the company may face sequential loss of momentum in the coming quarters.
Reacting to the news, TCS shares tanked over 6 per cent intraday, taking a hit of over Rs 27,000 crore in market capitalisation (m-cap). At the closing price, the m-cap of the most valued stock on BSE stood at Rs 4,57,365 crore compared with Rs 4,82,164 crore in the Wednesday's session.
Other IT stocks such as Infosys, HCL Tech, Wipro and Tech Mahindra also slumped up to 5 per cent on the BSE. BSE IT index was the top sectoral loser in today's session.
The top five IT companies put together, lost about Rs 45,000 crore in m-cap in the afternoon trade.
In a letter, TCS stated it is scheduling meetings with analysts to update investors.
"The company has characterized customer outlook as one marked by abundant caution", said TCS, adding that clients are holding back discretionary spending.
Delays in spending especially impacts banking and financial services sector, resulting in sequential loss of growth momentum, said the IT giant.
Analysts at IDFC Securities said slower revenue growth momentum and cross currency impact could sap momentum after soft June quarter.
Broker estimates 2 per cent decline in dollar revenue growth and flat margins in Q2.
The brokerage maintained "outperformer" rating but lowered target price to Rs 2,670 from Rs 2,770.
(With inputs from Reuters)