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Economic Times
15-05-2025
- Business
- Economic Times
Tata's pride losing the spark: Why TCS is faring worst among IT peers and group leaders
Tata Consultancy Services is facing challenges. It is underperforming compared to its peers like Infosys and HCL Tech. Global economic uncertainty and client-specific issues are affecting TCS. The BSNL contract ramp-down is also impacting revenue. Analysts are cautiously optimistic about TCS's recovery. Technical analysis suggests a potential short-term buying opportunity. TCS remains a market leader with a strong foundation. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Peer comparison: Where TCS is falling short Mixed financial performance Tired of too many ads? Remove Ads Outlook: A recovery in sight? Technical outlook - For traders For years, Tata Consultancy Services TCS ) has been the undisputed crown jewel of the Tata Group. This IT company was equated with stability, consistent growth, and robust returns to investors. However, in the last one year, the technology giant has struggled, underperforming not only its immediate peers -- Infosys (12%), HCL Tech (24%), and Wipro (11%) -- but also fellow Tata Group has declined 10% in the last one year period. The Nifty IT index is up over 15% in the same period. Among the Tata peers, TCS is placed behind most group companies. Only Tata Motors Tata Elxsi and Tata Technologies fared root of TCS's underperformance can be traced to a mix of external headwinds and internal challenges. At a macro level, the global technology sector has been grappling with uncertainty. The slowdown in the US and European markets, which are TCS's largest revenue contributors, has hit client high interest rates, and geopolitical tensions have also led to cautious IT spending by clients, particularly in discretionary and transformational has also struggled with client-specific issues. The much-touted Bharat Sanchar Nigam Ltd (BSNL) contract, which was a significant revenue contributor, is witnessing a ramp-down, negatively impacting the company's top the company has reported slower deal conversions and delays in decision-making across multiple sectors, including retail, manufacturing, and healthcare, further dampening revenue Pokharna, VP-Fundamental Research – IT at Kotak Securities, highlights that TCS's management has acknowledged challenges in client spending across retail, manufacturing, and insurance sectors. "IT services spending growth is likely to reduce below our base case assumption of 4-5% in FY26, with delays in project executions," he TCS has been facing growth headwinds, its peers have performed better. HCL Tech's focus on high-growth digital transformation and cloud services has paid off to an extent. Infosys has also managed to sustain strong deal wins, while Wipro's aggressive M&A strategy has enabled it to expand its client Jain, Head of Research at Arihant Capital Markets said "TCS has been struggling to maintain growth momentum in comparison to its peers. Companies like HCL Tech have delivered industry-leading growth for consecutive quarters, which has led to stronger market financial performance has not been poor, but it has been far from stellar. In 4QFY25, the company reported dollar revenue growth of 1.4% year-on-year (YoY), but saw a 1% quarter-on-quarter (QoQ) decline. Its constant currency (CC) revenue growth was 2.5% YoY, but the sequential decline of 0.6% underscored the company's new deal wins stood at $12.2 billion, well above the guided range of $7-9 billion. Yet, this did not translate into immediate growth due to delays in client analysts remain cautiously optimistic about TCS. Sumit Pokharna of Kotak Securities believes that while the company is relatively resilient, it is not immune to sectoral slowdowns. "TCS is more resilient to the slowdown, but not immune to it, in our view," he stated. Pritesh Thakkar of PL Capital pointed out that the BSNL deal ramp-down and client-specific slowdowns will continue to weigh on Equities has cut its target price for TCS, expecting a slower recovery in North America and the financial services segment. 'We expect a US$ revenue CAGR of 3% (vs. 4.5% earlier) and PAT CAGR of 7.5% for FY25-27,' it Institutional maintained an "Add" rating but lowered the target price to Rs 3,652. "The valuation has become slightly reasonable, but growth certainty remains elusive," the brokerage a technical standpoint, TCS is currently trading above its 5, 10, 20, 30, and 50-day moving averages (DMAs) but remains below its 100 and 200-DMAs. Analysts said the Relative Strength Index (RSI) is at 67.4, indicating the stock is approaching overbought territory."TCS has formed a 'Bullish Hammer' pattern on the monthly chart and the prices have surpassed the high of the candle which indicates bottoming of the stock price and a trend reversal. Hence, we advise short term traders to buy TCS around Rs 3,630 for potential target around Rs 3,800," said Ruchit Jayantilal Jain, VP, Head – Equity Technical Research at Motilal is still a market leader with a diversified client base, and a solid balance sheet. The management's cautious optimism around generative AI (GenAI) and strong deal provide a silver lining. However, the near-term challenges of weak client spending, slower decision-making, and the BSNL ramp-down cannot be ignored.: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
Time of India
15-05-2025
- Business
- Time of India
Tata's pride losing the spark: Why TCS is faring worst among IT peers and group leaders
Live Events Peer comparison: Where TCS is falling short Mixed financial performance Outlook: A recovery in sight? Technical outlook - For traders (You can now subscribe to our (You can now subscribe to our ETMarkets WhatsApp channel For years, Tata Consultancy Services TCS ) has been the undisputed crown jewel of the Tata Group. This IT company was equated with stability, consistent growth, and robust returns to investors. However, in the last one year, the technology giant has struggled, underperforming not only its immediate peers -- Infosys (12%), HCL Tech (24%), and Wipro (11%) -- but also fellow Tata Group has declined 10% in the last one year period. The Nifty IT index is up over 15% in the same period. Among the Tata peers, TCS is placed behind most group companies. Only Tata Motors Tata Elxsi and Tata Technologies fared root of TCS's underperformance can be traced to a mix of external headwinds and internal challenges. At a macro level, the global technology sector has been grappling with uncertainty. The slowdown in the US and European markets, which are TCS's largest revenue contributors, has hit client high interest rates, and geopolitical tensions have also led to cautious IT spending by clients, particularly in discretionary and transformational has also struggled with client-specific issues. The much-touted Bharat Sanchar Nigam Ltd (BSNL) contract, which was a significant revenue contributor, is witnessing a ramp-down, negatively impacting the company's top the company has reported slower deal conversions and delays in decision-making across multiple sectors, including retail, manufacturing, and healthcare, further dampening revenue Pokharna, VP-Fundamental Research – IT at Kotak Securities, highlights that TCS's management has acknowledged challenges in client spending across retail, manufacturing, and insurance sectors. "IT services spending growth is likely to reduce below our base case assumption of 4-5% in FY26, with delays in project executions," he TCS has been facing growth headwinds, its peers have performed better. HCL Tech's focus on high-growth digital transformation and cloud services has paid off to an extent. Infosys has also managed to sustain strong deal wins, while Wipro's aggressive M&A strategy has enabled it to expand its client Jain, Head of Research at Arihant Capital Markets said "TCS has been struggling to maintain growth momentum in comparison to its peers. Companies like HCL Tech have delivered industry-leading growth for consecutive quarters, which has led to stronger market financial performance has not been poor, but it has been far from stellar. In 4QFY25, the company reported dollar revenue growth of 1.4% year-on-year (YoY), but saw a 1% quarter-on-quarter (QoQ) decline. Its constant currency (CC) revenue growth was 2.5% YoY, but the sequential decline of 0.6% underscored the company's new deal wins stood at $12.2 billion, well above the guided range of $7-9 billion. Yet, this did not translate into immediate growth due to delays in client analysts remain cautiously optimistic about TCS. Sumit Pokharna of Kotak Securities believes that while the company is relatively resilient, it is not immune to sectoral slowdowns. "TCS is more resilient to the slowdown, but not immune to it, in our view," he stated. Pritesh Thakkar of PL Capital pointed out that the BSNL deal ramp-down and client-specific slowdowns will continue to weigh on Equities has cut its target price for TCS, expecting a slower recovery in North America and the financial services segment. 'We expect a US$ revenue CAGR of 3% (vs. 4.5% earlier) and PAT CAGR of 7.5% for FY25-27,' it Institutional maintained an "Add" rating but lowered the target price to Rs 3,652. "The valuation has become slightly reasonable, but growth certainty remains elusive," the brokerage a technical standpoint, TCS is currently trading above its 5, 10, 20, 30, and 50-day moving averages (DMAs) but remains below its 100 and 200-DMAs. Analysts said the Relative Strength Index (RSI) is at 67.4, indicating the stock is approaching overbought territory."TCS has formed a 'Bullish Hammer' pattern on the monthly chart and the prices have surpassed the high of the candle which indicates bottoming of the stock price and a trend reversal. Hence, we advise short term traders to buy TCS around Rs 3,630 for potential target around Rs 3,800," said Ruchit Jayantilal Jain, VP, Head – Equity Technical Research at Motilal is still a market leader with a diversified client base, and a solid balance sheet. The management's cautious optimism around generative AI (GenAI) and strong deal provide a silver lining. However, the near-term challenges of weak client spending, slower decision-making, and the BSNL ramp-down cannot be ignored.: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
India.com
02-05-2025
- Business
- India.com
Meet man, studied from IIT Kanpur, raised Rs 120 crore for startup, now unable to pay rent due to…
Home Business Meet man, studied from IIT Kanpur, raised Rs 120 crore for startup, now unable to pay rent due to… Meet man, studied from IIT Kanpur, raised Rs 120 crore for startup, now unable to pay rent due to… In a viral LinkedIn post, Harsh Pokharna, who holds a degree in Mechanical Engineering from IIT Kanpur, revealed that in 2019, his fintech startup, OKCredit, had raised Rs 120 crore in funding, but today, he struggles to make monthly rent Harsh Pokharna (File) Over the fast few decades IIT alumni have emerged as successful entrepreneurs, building startups that have grown into multi-billion dollar companies. However, not everyone has tasted the same level of success, with some going bankrupt after failed ventures. One such individual is Harsh Pokharna, an IIT Kanpur alumnus, who raised Rs 120 crore in funding for his startup in 2019, but today even struggles to make monthly after burning through all his savings. Raised Rs 120 crore funding, today unable to make rent In a viral LinkedIn post, Harsh Pokharna, who holds a degree in Mechanical Engineering from IIT Kanpur, revealed that in 2019, his fintech startup, OKCredit, had raised Rs 120 crore in funding, but today, he struggles to make monthly rent like an unemployed college student. 'In 2019, even after raising ₹120 crore Series A for OkCredit, I was broke. I was living paycheck to paycheck. Had no savings and was still worrying about rent in Bangalore. And it's not just my story. I've seen it happen again and again. Founders raising millions,and still living like college kids. Stressed about survival,' Pokharna wrote. Venture capitalists pushing founders towards bankruptcy The entrepreneur claimed venture capitalists (VCs) were responsible for entrepreneurs going broke because they want 'founders to stay poor'. 'It's easier to control founders who are financially desperate. If a founder dares to ask for a little personal liquidity to clear their loans, to finally stop living on the edge. They're told they might 'lose their hunger',' he added. Harsh Pokharna added that while VCs have no issues in spending millions on serial founders who own 'beach houses and retirement funds', but upcoming founders are often told no when they ask for personal liquidity to clear their debts because VCs feel that a 'founder with money becomes dangerous. Dangerous enough to say no. Dangerous enough to walk away. Dangerous enough to build on their own terms.' 'Apparently, money only kills ambition when it's in your hands. Not theirs. The truth is – a little financial security doesn't make founders weak. It makes them fearless. So if you're a founder, don't let anyone shame you into staying poor. Build your dream. But build your freedom too,' he added. Pokharna's post stirs debate about startup ecosystem and funding Harsh Pokharna's post has stirred a debate among netizens about the country's much-hyped startup ecosystem and venture capitalists, and the sacrifices entrepreneurs make to build a successful company from the ground up. 'I've always believed that financial security doesn't dull ambition, it gives you the freedom to think clearer and build better. No founder should feel guilty for wanting peace of mind while building their dream. You can build impact and stability — it's not either-or. Thanks for calling this out so honestly,' wrote one user. 'So why take money from such VCs? why not prefer VCs who are flexible and healthy with founders, or why not go the bootstrap + MSME loans route?,' asked another. 'It's the harsh reality of Startup founders. Life was like a king when living with Pay cheque and the same becomes a nightmare when giving pay to people. Sometimes we have to give up so many personal requirements. Entrepreneurship seems to be an one way entry, getting into it is easy but when you are addicted to it, it will be very difficult,' a third commented. For breaking news and live news updates, like us on Facebook or follow us on Twitter and Instagram. Read more on Latest Business News on More Stories
India Today
02-05-2025
- Business
- India Today
Bengaluru CEO says he raised Rs 120 crore but was still 'broke, worried about rent'
A Bengaluru-based entrepreneur has revealed that he was living paycheck to paycheck even after raising Rs 120 crore in funding for his startup in Pokharna, co-founder and CEO of digital ledger app OkCredit, shared a post on LinkedIn in which he wrote about the personal struggles faced by startup founders.'In 2019, even after raising Rs 120 crore Series A for OkCredit, I was broke. I was living paycheck to paycheck. Had no savings and was still worrying about rent in Bangalore,' Pokharna His admission is more than just a personal anecdote - it's a critique of the venture capital culture that, he argues, keeps early-stage founders financially insecure. Pokharna also claimed that several venture capitalists resist offering founders any personal liquidity, fearing it will dull their drive.'Because VCs want founders to stay poor. A founder with money becomes dangerous. Dangerous enough to say no. Dangerous enough to walk away. Dangerous enough to build on their own terms,' he also wrote about the contradiction in how investors often pour millions into serial entrepreneurs with financial cushions, while expecting first-time founders to endure financial stress in the name of ambition.'Apparently, money only kills ambition when it's in your hands. Not theirs,' he a look at the post here:Several users found Pokharna's post 'really insightful' and said that it 'hits hard'.advertisement'The illusion of startup success often hides the personal struggles of founders. Financial freedom isn't a luxury. It's a necessity for fearless innovation,' a user comment read: 'A slow path towards financial security doesn't kill ambition, it kills fear. And that's the part no one talks about.'Harsh Pokharna concluded his post with valuable advice for entrepreneurs: 'So, if you're a founder, don't let anyone shame you into staying poor. Build your dream. But build your freedom too.'Tune InMust Watch
Time of India
01-05-2025
- Business
- Time of India
Bengaluru CEO who raised Rs 120 crore funding shares why investors love 'poor' founders who live like college kids
Harsh Pokharna , co-founder and CEO of Bengaluru-based startup OKCredit, revealed that he was broke and living paycheck to paycheck in 2019—even after raising Rs 120 crore in funding for his company. In a detailed LinkedIn post, Pokharna said this experience was not unique and criticised venture capitalists (VCs) for keeping startup founders under financial pressure. #Pahalgam Terrorist Attack Nuclear Power! How India and Pakistan's arsenals stack up Does America have a plan to capture Pakistan's nuclear weapons? Airspace blockade: India plots a flight path to skip Pakistan VCs prefer financially strained founders, says Pokharna In his post, the IIT graduate wrote, 'VCs want founders to stay poor… So if you're a founder, don't let anyone shame you into staying poor.' He added, 'Founders raising millions, and still living like college kids. Stressed about survival.' Pokharna said VCs often prefer that founders remain financially dependent, which gives them more control. 'A founder with money becomes dangerous,' he wrote. He explained that when founders have personal money, they gain the confidence to build businesses on their own terms and to disagree with investors. 5 5 Next Stay Playback speed 1x Normal Back 0.25x 0.5x 1x Normal 1.5x 2x 5 5 / Skip Ads by by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Victoria Principal Is Almost 75, See Her Now Reportingly Undo Personal liquidity often discouraged, claims CEO He criticised the resistance some founders face when seeking personal financial stability. 'If a founder dares to ask for a little personal liquidity to clear their loans, to finally stop living on the edge, they're told they might 'lose their hunger,'' Pokharna wrote. He also pointed to a double standard in how funds are distributed. 'Meanwhile, the same VCs have no problem throwing millions at serial founders who have beach houses and retirement funds,' he said. 'Apparently, money only kills ambition when it's in your hands. Not theirs.' Live Events Message to founders: build freedom too Pokharna encouraged founders to protect their financial well-being while pursuing their business goals. 'Don't let anyone shame you into staying poor. Build your dream. But build your freedom too,' he wrote. Post strikes chord with startup community Since its publication, the post has gone viral and triggered responses from other entrepreneurs and professionals. One user commented, 'The 'broke but building' phase is often glorified but the struggle is real. I've seen founders do incredible things while carrying silent financial anxiety.' Another wrote, 'I've always believed that financial security doesn't dull ambition, it gives you the freedom to think clearer and build better. No founder should feel guilty for wanting peace of mind while building their dream. You can build impact and stability — it's not either-or. Thanks for calling this out so honestly.' Others supported the message with similar sentiments. 'Can't agree more. It's such a taboo today if a founder tries to take a decent salary,' one said. Another added, 'This post is so real! The struggle of being a founder, constantly juggling financial pressures while trying to build a dream, hits hard.'
