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Monday, September 29, 2008

Why TCS n Satyam hit 52 week lows?

Effect of USA Turmoil have shown up it's effect on these Indian IT Biggies since they derive huge chunk of their income from Banking and Financial sector clients in USA.

Shares of Tata Consultancy Services fell 8.4 per cent to Rs 619.65 on Monday, slightly off the 52-week low of Rs 612.1 touched intra-day.

Analysts at foreign brokerage houses point out that TCS generated nearly 43.6 per cent of its FY 08 revenues of Rs 22, 861.4 crore from the banking, financial and insurance sector (BFSI).

In addition, TCS exposure to the financial sector in terms of generating revenues is the highest amongst the top 5 Indian IT companies, with Satyam Computer at the lowest.

And given the current uncertainties in the global financial system due to the collapse of several iconic American institutions, market sources point out that punters are exiting from stocks like TCS in droves.

Even companies like Satyam, which derived 21.4 per cent of their June 2009 revenues of Rs 2620 crore from the BFSI segment, saw its stock reach an intra-day 52-week low of Rs 289. The stock closed at Rs 292.55, down 9.1 per cent.
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