TCS refutes any fraud in recruitment process; check stock reaction

Shares of Tata Consultancy Services (TCS) dropped 0.55 percent in early trade on June 26, post the denial of any fraud in recruitment process by the most valuable technology company in India. At 9:24 am the TCS stock was trading 0.72 percent lower at Rs 3193 on NSE.

Details about the clarification from TCS

In a clarification note to exchanges on June 23, TCS said that “the recruitment activities in the company are not handled by the Resource Management Group (RMG) as alleged, therefore the reference to alleged scam in recruitment process is incorrect.”

“After the findings of the internal investigation, TCS said that the issue relates to breach of company’s code of conduct by certain employees and vendors providing contractors; and no key managerial person of the company has been found to be involved. Hence, the allegations do not involve any fraud by or against the company and (has) no financial impact.”

Follow our live blog for all market action

Meanwhile, Pune-based labour union Nascent Information Technology Employees Senate (NITES) said it has written to the Ministry of Labour and Employment, Government of India regarding the matter. “The impact of this scandal on the existing and future employees of TCS cannot be overstated. It has created an environment of distrust, affecting the morale and motivation of the workforce…..It undermines fair competition, obstructs merit-based hiring, and creates an environment of mistrust and uncertainty,” said Harpreet Singh Saluja, President of NITES.

Recent developments in the Company

In a BSE filing dated June 21, 2023, TCS detailed about the deal of the company with Nest, UK’s largest workplace pension scheme and the plan of the IT giant for the upcoming decade. The notification further stated that, “We wish to inform that the contract value was signed for £840 million with an initial tenure of 10 years. The total maximum estimated value of the contract, if extended to the entirety of its eighteen-year tenure, will be £1.5 billion.”

Brokerage Views

Motilal Oswal in a research report dated June 10, 2023 has given a target price of Rs 3860 per share signifying a potential upside of 20 percent from the current market price of Rs 3210.

Disclaimer: The views and investment tips expressed by experts on Moneycontrol are their own and not those of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions.