Mumbai: IT sector stocks suffered losses on Monday after Tata Consultancy Service's first quarter performance missed estimates and management commentary indicated clients' tech spends could be impacted due to the current macro economic environment.
TCS shares closed 4.64 per cent down at Rs 3,113.25 on the BSE, wiping out Rs 55,471.21 crore from its market capitalisation, now reduced to Rs 11.39 lakh crore.
Brokerages see further downside risk to the TCS stock.
"We reiterate our underweight stance on the Indian IT services and believe deployment in the sector should be very slow and gradual as we believe there would be many unknown risks (normalisation of tech spend, downside risk on FY24 revenue growth etc.) ahead, which might further degrade valuations," said ICICI Securities in its review of TCS first quarter performance.
HCL Technologies, which will announce its Q1 results on Tuesday, also fell 4.10 per cent. The other frontline IT stocks also fell, led by Infosys (-2.72 per cent), Wipro (-1.91 per cent), L&T Infotech (-2.74 per cent) and Tech Mahindra (-1.83 per cent).
The BSE IT Index was the top loser among the sectoral indices, falling 2.70 per cent.