Tata Consultancy Services Limited (TCS) shares fell as much as 4.7% to a three-week low of Rs 3,111 on Monday after the Indian IT major missed quarterly profit expectations due to increased employee-related expenditures.

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Analysts noted signs of a downturn in demand as the IT services exporter reported first-quarter earnings of 94.78 billion rupees ($1.19 billion), significantly below Refinitiv data projections of 98.51 billion rupees.

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In the June quarter, the company recorded a 5.21% year-on-year (YoY) increase in consolidated net profit at Rs 9,478 crore, compared to Rs 9,008 crore in the same period the previous year.

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Consolidated revenue for the period increased 16.2% year on year to Rs 52,758 crore, up from Rs 45,411 crore in the year-ago quarter, according to a BSE filing. The Ebit margin in the June quarter was 23.1%, compared to 25% in the March quarter and 25.5% in the June quarter last year.

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“Although management expects tech spending to be resilient, we see clear signs of moderation in demand,” ICICI Securities said in a note, citing slowing hiring, muted deal growth and weak momentum in Europe.

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The IT major added 14,136 new employees during the quarter, bringing the overall workforce strength to 6,06,331. According to the company, the previous twelve-month attrition rate in IT services was 19.7%. The IT company’s board has declared an interim dividend of Rs 8 per share.

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TCS shares, which are down 12.7% this year as of Friday’s closing, are also on track for their greatest intraday percentage drop in four weeks