TCS shareholders suffer second worst crash, lose Rs 3.43 lakh crore in 2025

Due to a mixed Q1 performance, a negative demand expectation, and the disruptive power of generative AI, shares of Tata Consultancy Services (TCS) are experiencing their second-worst drop in history. This will affect investor sentiment in 2025. This year, shareholders have lost Rs 3.43 lakh crore, and the stock of the leader in the IT sector has already dropped 33%. The IT company’s market capitalization dropped from a peak of Rs 14.82 lakh crore on December 31, 2024, to Rs 11.38 lakh crore today.

According on the stock’s year-to-date loss, 2025 will be the most difficult year for the IT sector since the crash 17 years ago. This is the second-worst drop in the history of the Tata Group’s stock in terms of percentage points. During the global financial crisis in 2008, the IT stock had its largest meltdown, plunging 56% and losing around Rs 5.66 lakh crore in market value.

In the meantime, foreign institutional investors (FIIs) now own 11.48% of TCS, down from 12.35% in the June 2024 quarter. Over the past year, mutual funds have increased their ownership of TCS from 4.25% to 5.13%.

Global stockbroker JPMorgan’s changed the stock’s rating from “neutral” to “overweight” on Monday. It increased the target price of the IT stock from Rs 3,650 to Rs 3,800 per share. This suggests a possible gain of 24.4% over the last close. Despite its difficulties, TCS maintains a healthy order book and high client engagement, according to CEO K Krithivasan, who is upbeat about the company’s medium- to long-term prospects.

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.