TCS shares in focus after Rs 1,600 crore fine. Details here

Shares of Tata Consultancy Services Ltd (TCS) are in the spotlight today after the IT firm announced that a United States District Court imposed a penalty of approximately Rs 1,600 crore (about $194.2 million) on it.

The court found TCS guilty of multiple charges alleging misappropriation of trade secrets. TCS shares ended 1.17% lower at Rs 3,831.95 on the Bombay Stock Exchange (BSE) on Friday.

The stock had opened higher at Rs 3,885 earlier in the session. The market capitalisation of TCS dropped to Rs 13.86 lakh crore. A total of 0.67 lakh shares were traded, amounting to a turnover of Rs 25.68 crore on the BSE.

TCS stock has a one-year beta of 0.4, indicating low volatility over the past year. The relative strength index (RSI) of TCS stood at 49.4, suggesting that the stock is neither overbought nor oversold.

The stock is trading above its 10-day, 20-day, and 200-day moving averages but below its 30-day, 50-day, 100-day, and 150-day moving averages. Over the past year, TCS shares have rallied 18%, and they have risen by 19.33% over the past two years.

"We hereby inform you that the Company has received an adverse judgement passed by the United States District Court, Northern District of Texas, Dallas Division," said TCS in a statement to the stock exchange.

Computer Sciences Corporation (CSC), now DXC Technology Company (DXC), had filed the case against TCS, alleging that the Indian IT firm misappropriated its trade secrets.

The court ruled that TCS is liable to pay CSC $56,151,583 in compensatory damages, $112,303,166 in exemplary damages, and $25,773,576.60 in prejudgment interest through June 13, 2024.

Despite the ruling, TCS stated that it has strong arguments to counter the judgement and plans to defend its position through a review petition or an appeal to the appropriate court. The company received the court order on June 14, 2024.

TCS assured that the judgement will not have a major adverse impact on its financials and operations. The company is taking necessary steps to protect its interests and address the legal challenges presented by this ruling.

"The company believes that it has strong arguments in the matter and intends to defend its position through a review petition or appeal to the appropriate court," said TCS.