When Will TCS Share Price Stop Falling?

The Indian equity markets have turned cautious over the last one month.

A variety of factors are influencing the markets, such as global cues from the US trade tariff threats, domestic concerns like the Reserve Bank of India (RBI) bi-monthly monetary policy announcement, and corporate earnings, among others.

One set of stocks that has fallen over the last one month is IT stocks. Tata Consultancy Services, in particular, (TCS) has seen a big drop in its share price of more than 10% during the period. This is significantly more than the benchmark indices.

Here are some reasons for a fall in the share price of TCS...

3 Reasons Why TCS Share Price is Falling?

#1 Quarterly Results

TCS Q1 FY26 results were below expectations, mainly due to a 3.3% sequential decline in constant currency revenue.

The revenue for Q1 FY26 was Rs 634.37 billion (bn), compared to Rs 644.79 bn in Q4 FY25. The US dollar revenue also fell by about 1.1% year-on-year, while the consolidated net profit rose 6% year-on-year to Rs 127.60 bn.

Since the Q1 2026 earnings have been declared, the stock has been under pressure over the last few weeks.

#2 Tepid IT Spending

The management of the company has acknowledged that global macroeconomic uncertainties and geopolitical tensions have led to a contraction in demand and cautious client spending, impacting the top-line growth.

Moreover, there have also been project delays, and a focus on conserving cash in key markets such as North America, the UK, and Continental Europe.

These conditions are not peculiar to TCS alone, but apply to the industry as a whole.

#3 Selling in IT Stocks

There has been selling across most IT stocks, including those from the midcap segment. The Nifty IT Index, which was at 38,983 points on 7 July 2025, has dropped to 35,014 points at the time of writing on 5 August. The fall is slightly more than 10% on the IT index itself.

What Next?

The weakness in discretionary spending and reduced budgets have all contributed to the revenue slowdown for TCS.

Because of the current scenario, the company decided to cut 2% of its global workforce (12,200 employees), mainly from mid and senior levels, to build a future-ready company. This shall help manage margins better and improve the profitability of TCS.

Across industries, TCS's clients are increasingly shifting their focus from a use-case-based approach to ROI led scaling of AI.

TCS's AI initiatives cover innovation ecosystem development, extensive workforce reskilling, client-driven AI deployments, strategic tech partnerships, cybersecurity advancements powered by AI, and organisational realignment to harness AI opportunities effectively.

TCS's investment is across the AI ecosystem, including infrastructure, data platform solutions, AI agents and business applications. It has launched TCS SovereignSecure Cloud, TCS DigiBOLT, and TCS Cyber Defense Suite, to accelerate AI-led transformation.

Going forward, the conversion of large deals into revenue growth and the ramping up of signed deals shall be crucial for sustaining income and improving performance in subsequent quarters.

In addition, revival in discretionary spending, particularly in BFSI, execution of large digital transformation projects emphasising AI and cloud technologies, hiring and talent retention, would remain pivotal to growth.

How Shares of TCS Have Performed Recently

Over the last one month, the share price of TCS has lost 10% from levels of Rs 3,411 to the current levels of Rs 3,058.25. In the past one year, shares of the company have lost 26%.

The stock hit a 52-week high of Rs 4,585.90 on 2 September 2024, while its 52-week low was Rs 2,992.05 on 4 August 2025.

About TCS

TCS is a leading global IT services, consulting, and business solutions organisation, and part of the Tata Group, India's largest multinational conglomerate.

TCS partners with industry-leading companies to drive digital transformation and innovation. The company helps clients evolve as perpetually adaptive enterprises by rapidly applying and scaling new technologies, from early mainframes to modern Artificial Intelligence and cloud solutions.

The company is recognised for its engineering excellence, high standards of customer service, and long-term client relationships that often span decades.

TCS also pays attention to social responsibility by sponsoring major international marathons such as the New York City and London Marathons, focusing on health, sustainability, and community empowerment.

To know more, check out the TCS fact sheet and latest quarterly results. You can also compare TCS with its peers on our website.

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Investors should evaluate the company's fundamentals, corporate governance, and valuations of the stock as key factors when conducting due diligence before making investment decisions.

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