Tata Consultancy Services Ltd (TCS) shares are under scrutiny today after the IT giant reported that a United States District Court assessed a penalty of roughly $194.2 million (nearly Rs 1,600 crore) for suspected trade secret misuse. TCS shares fell 1.17% on Friday to Rs 3831.95 on the BSE, despite opening higher at Rs 3,885 in the same session. The company’s market capitalization fell to Rs 13.86 lakh crore, with a turnover of Rs 25.68 crore and a volume of 0.67 lakh shares.
Technical Performance and Stock Movements
TCS stock is trading above the 10-day, 20-day, and 200-day moving averages, but below the 30-day, 50-day, 100-day, and 150-day moving averages. The stock’s one-year beta is 0.4, indicating modest volatility. The Relative Strength Index (RSI) is at 49.4, indicating that the stock is neither overbought nor oversold. TCS shares have risen 18% in the past year and 19.33% in the last two years.
Details of the US Court Penalty
In a recent filing to the stock exchange, TCS disclosed the adverse judgment passed by the United States District Court, Northern District of Texas, Dallas Division. The case was filed by Computer Sciences Corporation (CSC), now DXC Technology Company (DXC), alleging that TCS misappropriated its trade secrets. The court ordered TCS to pay $56,151,583 in compensatory damages, $112,303,166 in exemplary damages, and $25,773,576.60 in prejudgment interest through June 13, 2024.
TCS’s Response and Future Actions
TCS has expressed a strong desire to challenge the verdict, indicating that it intends to submit a review petition or an appeal with the proper court. The corporation stated that the decision will have no substantial impact on its financial or operational performance. TCS is taking steps to safeguard its interests and address the legal issues raised by the verdict. The corporation got the court ruling on June 14, 2024, and believes it has strong arguments to defend its stance.
Market Context
The penalty comes at a time when TCS shares are performing well in the broader market, outperforming benchmarks and showing resilience. Despite the legal setback, the company’s fundamentals and long-term growth prospects remain strong, bolstered by its diversified portfolio and robust market position.
TCS’s proactive measures to address this legal challenge highlight the company’s resilience and commitment to safeguarding its reputation and business interests. The outcome of the appeal process will be closely watched by stakeholders and could have broader implications for the company’s operations in the United States.
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