TCS market capitalisation: Amid controversy over its decision to cut over 12,000 jobs in the current fiscal, India’s largest IT services exporter Tata Consultancy Services (TCS) has seen a massive drop in its market capitalisation. It fell from Rs 16.57 lakh crore to Rs 10.93 lakh crore, a drop of Rs 5.66 lakh crore.
According to market analysts, TCS, the flagship company of the Tata Group, is going through its worst crisis since the 2008 recession, when its shares fell 55 per cent. TCS share prices are projected to fall by 25 per cent in 2025, and experts predict that if this decline continues, the current fiscal year could be the worst financial year in the company’s history.
Why are TCS shares falling?
According to analysts, the Indian stock market has witnessed turmoil in the last few months as foreign investors have been pulling out money from the market in large numbers amid US President Donald Trump’s tariff war against India and the recent announcement of imposing 50% import duty on Indian exports.
The IT industry, once considered a favourite of foreign institutional investors (FIIs), is now facing a downfall. Foreign investors have reduced their stake in TCS from 12.35% in June 2024 to 11.48% in June 2025, resulting in the company’s shares falling over 25 per cent in the current fiscal.
The Nifty IT index has fallen 25% so far this year, making it the worst-performing sector in the market as more than half of the Rs 95,600 crore pulled out of India by foreign institutional investors till July 2025 has come from IT stocks alone.
Why did mutual fund investments rise?
Meanwhile, domestic mutual funds have increased their stake in TCS from 4.25% to 5.13% and made fresh purchases worth Rs 400 crore in the company, according to the data. As per the data, trailing PE of TCS has declined from 41 times to 20 times, the five-year CAGR is 8.5%, while the stock CAGR is 6%.
Notably, India’s IT sector has grown at a compound annual rate of 12.5% over the last two decades, but has underperformed the Nifty in the last three to five years.
Layoffs in TCS
According to recent media reports, TCS is considering cutting its global workforce by about 2 per cent, which will result in the job loss of over 12,000 TCS employees in the current financial year. The company’s decision is being investigated, with Jefferies warning that layoffs in TCS could result in a slowdown in implementations in the near term and a workforce increase in the long term.