Shares of Tata Consultancy Services on Friday gave up all their early gains and closed over 1 per cent lower as the company's June quarter earnings failed to meet market expectations.
The stock, which started the trade in the green and gained 0.73 per cent to hit Rs 3,281 on the BSE in early trade, later gave up the gains and closed 1.52 per cent lower at Rs 3,207.75.
During the day, it hit an intra-day low of Rs 3,200, down 1.75 per cent. On the NSE, the stock closed at Rs 3,211.80, a decline of 1.43 per cent.
The company's quarterly results were announced post-market hours on Thursday.
"The IT sector also turned bearish as the initial earnings results did not meet the expectations of the market," said Vinod Nair, Head of Research at Geojit Financial Services.
The company's market valuation also diminished by Rs 18,254.8 crore to Rs 11,86,563.20 crore on the BSE.
In traded volume terms, 2.32 lakh shares were traded at the BSE and over 63.65 lakh units at the NSE during the day.
"IT index remained soft today after TCS missed earnings estimates," Binod Modi, Head Strategy at Reliance Securities said.
The BSE Information Technology index closed lower by 0.35 per cent.
The country's largest software firm TCS on Thursday reported a 28.5 per cent jump in June quarter net profit at Rs 9,008 crore and called out the domestic business as a drag, which restricted its overall growth because of the second wave of Covid-19.
The company, a cash cow for the over USD 100 billion Tata group, said the June quarter results were a tale of two contrasting trends of healthy growth in core markets like the US and segments like banking, and the domestic business being a drag.
However, it added that even in India, which has traditionally been an insignificant market for the firm, activity is showing some signs of improvement, and exuded confidence of meeting the overall double-digit revenue growth estimate for the financial year 2021-22 announced earlier.
The second wave dented revenues by as much as Rs 350 crore as businesses like passport issuances and tests-focused TCS iON remained impacted, its chief executive and managing director Rajesh Gopinathan told reporters.