Tata Consultancy Services (TCS) experiences significant plunge under Ratan Tata's oversight, shedding a remarkable Rs 17909 crore within 120 hours due to...

Tata Consultancy Services (TCS) experiences significant plunge under Ratan Tata's oversight, shedding a remarkable Rs 17909 crore within 120 hours due to...

A Fresh Perspective on TCS' Sizable Dip in Market Value

Let's dive into the nitty-gritty of India's tech titan, Tata Consultancy Services (TCS), known for its substantial presence in the market. Recently, TCS faced a considerable slump, losing approximately ₹17,909.53 crore in its market cap, reaching ₹12,53,486.42 crore by May 30, 2025. Shares plummeted 1.92% throughout the week, down to ₹3,460.

Cracking the Mystery:

The tech sector in India grappled with a severe slowdown, and TCS was no exception. The BSE benchmark index slipped by 270.07 points or 0.33 percent over the week. Joining TCS in this downturn were Mukesh Ambani's Reliance Industries, ICICI Bank, Infosys, Bajaj Finance, and Hindustan Unilever Ltd (HUL).

A closer look reveals that TCS's decline wasn't purely a market phenomenon. Sector-wide pressures, coupled with specific company challenges, contributed to this descent.

Sector-Wide Nervousness:

The broader IT sector struggled in 2025, with the Nifty IT Index plunging 14.6% year-to-date as of late May. This downturn was largely due to weak globalmacroeconomic indicators, particularly in the United States, a crucial market for Indian IT services, contributing to around 70% of India’s IT export revenue. The Moody’s rating downgrade for the US deepened investor concerns about the future revenue and earnings of Indian IT companies[4].

TCS-Specific Hiccups:

Despite being the largest IT services stock on the NSE and the most valuable company under Tata Sons, TCS had underperformed the broader market. Its shares fell 16% year-to-date while the Nifty 50 Index rose 3.27%. This slide was primarily driven by slowing revenue growth, especially after the termination of key contracts such as the one with BSNL, stirring worries about the revenue gap in the upcoming fiscal year[4].

Analyst Insights:

Analysts project a slowdown in TCS’s revenue growth, anticipating only a 4.0% annualized increase for the year ending 2026, compared to the historical average of 11% over the past five years. This growth rate is also relatively slower than the 6.4% projected for the broader industry[5].

These factors coalesced in May 2025, triggering elevated trading volumes and persistent drops in TCS’s share price[1][3][4].

Looking Ahead:

TCS was able to reach a USD 30 billion milestone in revenue for FY25 but reported a 1.7% year-on-year decline in consolidated net profit for Q4, totaling ₹12,224 crore. Despite these hurdles, TCS's CEO and MD, K Krithivasan, attributed the sustained growth to early and consistent investments in client engagement, intellectual property, talent development, and ecosystem expansion[2].

This goes to show that TCS, despite the current setbacks, remains resilient and equipped to navigate the ever-changing landscape of the tech industry. Stay tuned for more updates on this dynamic story.

Despite the significant dip in TCS's market value, other Indian industries were also impacted, with Bollywood, finance, and investing sectors not remaining untouched. For instance, Bajaj Finance experienced a decline, reflecting a broader trend in the business sector.

The slump in TCS's share price can be attributed to both external factors, such as the weak global macroeconomic indicators impacting the US, a crucial market for Indian IT services, and internal issues like the termination of key contracts, like the one with BSNL.

Analysts forecast a slower growth rate for TCS, predicting an annualized increase of only 4.0% for the year ending 2026, which is notably slower than the historical average of 11% over the past five years and the 6.4% projected for the broader industry. However, TCS's resilience remains evident, as demonstrated by its ability to reach a USD 30 billion milestone in revenue for FY25, despite the current setbacks.

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