S&P revises Tata Consultancy view to stable

S&P said it revised Tata Consultancy Services Ltd.’s outlook to stable from positive and affirmed the company’s A issuer rating.

“TCS' revenue growth and profitability over the next 12-18 months will be weaker than we earlier anticipated. We estimate global IT spending will contract by 4% in 2020, in line with our expectation of a 3.8% decline in global GDP because of the Covid-19 pandemic. We now expect TCS' revenue to rise 0%-1% in the fiscal year ending March 31, 2021, compared with growth of 5.3% in fiscal 2020,” S&P said in a press release.

The outlook reflects S&P’s view TCS will maintain its good competitive position, healthy cash holdings and strong operating cash flows over the next 12-24 months, the agency said.

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