TCS shareholders suffer second worst crash, lose Rs 3.43 lakh crore in 2025
TCS stock's performance reflects the broader struggles of the IT sector, yet mutual funds see potential in TCS amidst adjusted valuations and strong dividend yield.
- Aug 26, 2025,
- Updated Aug 26, 2025 12:03 PM IST
Shares of Tata Consultancy Services (TCS) are undergoing their second-worst crash in history as a weak demand outlook and the disruptive influence of generative AI, coupled with a mixed Q1 performance impact investor sentiment in 2025. The stock of IT sector leader is already down 33% with shareholders losing Rs 3.43 lakh crore this year. Market capitalisation of the IT firm fell to Rs 11.38 lakh crore today from a high of Rs 14.82 lakh crore on December 31, 2024.
The year-to-date decline in the IT sector stock marks 2025 as its most challenging year since the crash 17 years ago. In terms of percentage points, this is second worst crash in the Tata Group's stock history. The IT stock plummeted 56% in 2008 during the global financial crisis, clocking its biggest crash and losing nearly Rs 5.66 lakh crore in market value.
Meanwhile, foreign institutional investors (FIIs) have reduced their stake in TCS from 12.35% in June 2024 to 11.48% in the June 2025 quarter. However, mutual funds have raised their stake in TCS from 4.25% to 5.13% over the past year.
On Monday, global brokerage JPMorgan's upgraded the stock from "neutral" to "overweight. It raised the IT stock's target price to Rs 3,800 per share from Rs 3,650. This implies a potential upside of 24.4% from the previous close. TCS, despite facing challenges, retains strong client engagement and a robust order book, as noted by CEO K Krithivasan, who remains optimistic about the medium to long-term growth of the company.
BNP Paribas said, "Resilient fundamentals and attractive valuation make TCS our top pick in the current uncertain macroeconomic environment." They have a target price of Rs 4,400, emphasising TCS' potential for recovery post-FY26, once the BSNL deal diminishes in scale. This period of adjustment may lay the groundwork for future margin expansion and improved financial performance. Analysts believe that the company's strong dividend yield and strategic positioning could support its recovery in the long run.
Commenting on the IT stock's outlook in the short term, Ravi Singh, SVP - Retail Research, Religare Broking says, "TCS is currently traded in a prolonged bearish momentum on the daily chart with a lower high and lower low's structure. After the continuous downtrend, the stock has recently witnessed a bounce back from its strong support level of Rs 3,000, which it has tested multiple times in the month of August. However, despite the recent bounce, the overall trend remains weak as the price continues to trade below its long-term 50-day EMAs, signaling a sustained bearish stance. The 14-Day RSI has recovered to 55 levels, but it is yet to show a strong bullish divergence, indicating limited upside strength towards immediate resistance of Rs 3,200, unless the stock decisively sustains above the resistance zone, upside moves are likely to be capped, while a breakdown below Rs 3000 may open further downside toward Rs 2,850-2,900 in the near term. For existing investors, we recommend to 'hold' with strict stop loss below Rs 3,000 mark. Fresh investing should be ignored until the stock gives clear and sustained move above 3200 with higher high and higher low structure."
Mandar Bhojane, Senior Technical & Derivate Analyst, Choice Broking says, "TCS is currently trading at Rs 3144 and has recently broken out from a rounding bottom pattern after a prolonged correction phase. This breakout signals a possible trend reversal, and if the stock sustains above Rs 3140, it may confirm a bottoming out process. The overall IT sector has also shown signs of recovery from lower levels, supporting the bullish sentiment. A decisive close above Rs 3180 could open the path for higher levels around Rs 3280 and Rs 3350. On the downside, Rs 3100 and Rs 3070 will act as strong immediate supports, and any dips towards these levels can be considered as fresh buying opportunities. For prudent risk management, a stop-loss at Rs 3000 is advisable. As long as the stock trades above this level, the near-term outlook remains bullish with potential to test ?3280–?3350 in the coming sessions.
Shitij Gandhi, Sr Research Analyst (Technicals), SMC Global Securities believes the Rs 3,000 zone is a key level for the IT stock.
"TCS finds itself at a critical juncture on the technical charts after two weeks of muted performance. Short-term momentum is clearly under pressure but somehow Rs 3,000 mark could act as key psychological level for the stock . If TCS fails to defend Rs 3,000 level we could see the stock drifting closer to Rs 2900 in quick time. On higher side, any technical bounce from oversold zone could keep the IT stock under Rs 3200 level, which will act as key resistance level for the stock. For now, all eyes remain on the Rs 3,000 zone. Whether TCS breaks down or stages a rebound here could well decide the trajectory for the stock in the weeks ahead, " said Gandhi.
Shares of Tata Consultancy Services (TCS) are undergoing their second-worst crash in history as a weak demand outlook and the disruptive influence of generative AI, coupled with a mixed Q1 performance impact investor sentiment in 2025. The stock of IT sector leader is already down 33% with shareholders losing Rs 3.43 lakh crore this year. Market capitalisation of the IT firm fell to Rs 11.38 lakh crore today from a high of Rs 14.82 lakh crore on December 31, 2024.
The year-to-date decline in the IT sector stock marks 2025 as its most challenging year since the crash 17 years ago. In terms of percentage points, this is second worst crash in the Tata Group's stock history. The IT stock plummeted 56% in 2008 during the global financial crisis, clocking its biggest crash and losing nearly Rs 5.66 lakh crore in market value.
Meanwhile, foreign institutional investors (FIIs) have reduced their stake in TCS from 12.35% in June 2024 to 11.48% in the June 2025 quarter. However, mutual funds have raised their stake in TCS from 4.25% to 5.13% over the past year.
On Monday, global brokerage JPMorgan's upgraded the stock from "neutral" to "overweight. It raised the IT stock's target price to Rs 3,800 per share from Rs 3,650. This implies a potential upside of 24.4% from the previous close. TCS, despite facing challenges, retains strong client engagement and a robust order book, as noted by CEO K Krithivasan, who remains optimistic about the medium to long-term growth of the company.
BNP Paribas said, "Resilient fundamentals and attractive valuation make TCS our top pick in the current uncertain macroeconomic environment." They have a target price of Rs 4,400, emphasising TCS' potential for recovery post-FY26, once the BSNL deal diminishes in scale. This period of adjustment may lay the groundwork for future margin expansion and improved financial performance. Analysts believe that the company's strong dividend yield and strategic positioning could support its recovery in the long run.
Commenting on the IT stock's outlook in the short term, Ravi Singh, SVP - Retail Research, Religare Broking says, "TCS is currently traded in a prolonged bearish momentum on the daily chart with a lower high and lower low's structure. After the continuous downtrend, the stock has recently witnessed a bounce back from its strong support level of Rs 3,000, which it has tested multiple times in the month of August. However, despite the recent bounce, the overall trend remains weak as the price continues to trade below its long-term 50-day EMAs, signaling a sustained bearish stance. The 14-Day RSI has recovered to 55 levels, but it is yet to show a strong bullish divergence, indicating limited upside strength towards immediate resistance of Rs 3,200, unless the stock decisively sustains above the resistance zone, upside moves are likely to be capped, while a breakdown below Rs 3000 may open further downside toward Rs 2,850-2,900 in the near term. For existing investors, we recommend to 'hold' with strict stop loss below Rs 3,000 mark. Fresh investing should be ignored until the stock gives clear and sustained move above 3200 with higher high and higher low structure."
Mandar Bhojane, Senior Technical & Derivate Analyst, Choice Broking says, "TCS is currently trading at Rs 3144 and has recently broken out from a rounding bottom pattern after a prolonged correction phase. This breakout signals a possible trend reversal, and if the stock sustains above Rs 3140, it may confirm a bottoming out process. The overall IT sector has also shown signs of recovery from lower levels, supporting the bullish sentiment. A decisive close above Rs 3180 could open the path for higher levels around Rs 3280 and Rs 3350. On the downside, Rs 3100 and Rs 3070 will act as strong immediate supports, and any dips towards these levels can be considered as fresh buying opportunities. For prudent risk management, a stop-loss at Rs 3000 is advisable. As long as the stock trades above this level, the near-term outlook remains bullish with potential to test ?3280–?3350 in the coming sessions.
Shitij Gandhi, Sr Research Analyst (Technicals), SMC Global Securities believes the Rs 3,000 zone is a key level for the IT stock.
"TCS finds itself at a critical juncture on the technical charts after two weeks of muted performance. Short-term momentum is clearly under pressure but somehow Rs 3,000 mark could act as key psychological level for the stock . If TCS fails to defend Rs 3,000 level we could see the stock drifting closer to Rs 2900 in quick time. On higher side, any technical bounce from oversold zone could keep the IT stock under Rs 3200 level, which will act as key resistance level for the stock. For now, all eyes remain on the Rs 3,000 zone. Whether TCS breaks down or stages a rebound here could well decide the trajectory for the stock in the weeks ahead, " said Gandhi.