TCS Nears 52-Week Low as US Slowdown Hits IT Stocks Hard
TCS shares have declined 16% since January 2025, approaching a 52-week low due to concerns over a slowing US economy. The stock has underperformed the broader market, falling 11% in the past month compared to a 1% drop in the Sensex and a 6.7% decline in the BSE IT Index. In Q3FY25, TCS reported $7.54 billion in revenue, down 1.7% quarter-on-quarter but up 3.5% year-on-year, with an EBIT margin of 24.5%. The IT sector faces weak deal momentum and cautious client spending amid global economic uncertainty.
While BFSI and retail sectors show early signs of recovery, manufacturing and healthcare remain sluggish. Analysts expect EBIT margins to gradually reach 26-28% by FY27, driven by cost efficiencies and stronger deal wins. Despite short-term challenges, TCS’s focus on execution and digital transformation is expected to drive long-term growth.

TCS Nears 52-Week Low as US Slowdown Hits IT Stocks Hard
Tata Consultancy Services (TCS) continues to face selling pressure, hitting an eight-month low of ₹3,624.90 before closing at ₹3,631, down 1.19%. Over the past two days, the stock has declined by 4%, driven by concerns over a slowing US economy.
Now trading close to its 52-week low of ₹3,593.30 (recorded on June 4, 2024), TCS has underperformed the broader market. Over the past month, it has fallen 11%, compared to a 1% dip in the BSE Sensex and a 6.7% drop in the BSE IT Index.
IT Sector Struggles Amid Global Slowdown
Industries dependent on exports, including IT services, chemicals, and automobiles, are grappling with slowing global growth, supply chain disruptions, and pricing pressures. The IT sector, typically a key driver of expansion, is seeing weaker deal momentum and cautious client spending.
TCS Q3FY25 Performance & Stock Decline
Since January 2025, following Q3FY25 earnings, TCS shares have dropped 16%. The company reported revenue of $7.54 billion, a 1.7% quarter-on-quarter decline but a 3.5% year-on-year increase in constant currency terms.
- EBIT margin: 24.5%, improving by 40 basis points despite macroeconomic challenges.
- Management Outlook: The company sees improving contract values and deal cycles, signaling growing confidence.
Analyst Projections & Market Sentiment
KRChoksey Shares and Securities revised TCS’s FY26 EPS estimate to ₹153.9 (from ₹158.2), reflecting slower-than-expected margin recovery.
While the company aims for a 26-28% EBIT margin, analysts expect a gradual improvement, with meaningful expansion likely by FY27, supported by higher deal wins and increased discretionary spending. TCS’s strategic investments in automation, AI, and cloud services are expected to drive long-term operational efficiencies, contributing to margin growth.
Additionally, the company’s focus on large enterprise clients, coupled with its strong execution capabilities, positions it well to capitalize on digital transformation trends. As global economic conditions stabilize, increased IT spending in key sectors like BFSI, retail, and healthcare could further accelerate margin expansion, reinforcing TCS’s leadership in the IT services industry.
Sectoral Trends & Challenges
- BFSI and Retail: Showing early signs of recovery.
- Manufacturing, Life Sciences, and Healthcare: Expected to remain weak in the short term but may recover in the medium term.
- Auto & Aerospace: Facing macroeconomic and industry-specific challenges but expected to rebound soon.
- Telecom: Struggling with cost optimization driven by technology shifts.
Despite near-term headwinds, analysts remain optimistic about TCS’s long-term growth, driven by improving discretionary spending and faster deal closures. The company’s strong pipeline of large deals and its focus on digital transformation, cloud services, and AI-driven solutions are expected to support revenue growth in the coming years. Additionally, TCS’s robust client relationships and global presence position it well to navigate macroeconomic challenges.
While near-term volatility persists, experts anticipate a gradual recovery in demand for IT services, particularly in banking, retail, and manufacturing sectors. With cost optimization efforts and operational efficiencies, TCS is likely to sustain profitability and enhance shareholder value over time.
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