TCS is in its worst four-year slump after Ratan Tata's departure. What's driving the stock's steady decline?
Tata Consultancy Services (TCS Share Price) shares continued to decline, down 36% from their 52-week high. This decline is due to global economic pressures and geopolitical tensions. The US VG policy and trade tariffs have also added to the pressure. Slowing demand in the IT sector and limited budgets have also impacted TCS's growth outlook.
Staff Editor 
Shares of India's largest IT company, Tata Consultancy Services (TCS Share Price), continue their downward trend. The stock closed 1.76% lower on Friday.
It is now down nearly 36% from its 52-week high. This decline is not limited to the company alone, but is impacting the entire IT sector, which is currently grappling with global economic pressures, regulatory uncertainty, and geopolitical tensions.
Technically, TCS shares have entered the oversold zone, with its Relative Strength Index (RSI) falling to 42.80.
US policy and trade tensions are increasing pressures.
The biggest concern for TCS is the new US visa policy. US President Donald Trump has passed a proposal to impose a $100,000 annual fee for H-1B visas.
This policy is now discouraging mass recruitment and prioritizing highly skilled professionals. Since Indian companies like TCS rely on H-1B visas to complete onshore projects in the US, this change could increase operational costs and impact their project delivery capabilities.
Furthermore, new trade tariffs imposed by the Trump administration have increased market uncertainty, creating a risk-off mood and impacting investor sentiment.
Sluggish Demand in the IT Sector
The current sluggishness in the IT sector has been confirmed by Accenture's recent quarterly results. Accenture has issued a weak growth outlook, indicating that demand for large IT projects and discretionary spending remains sluggish.
Consequently, brokerage houses like Citi and Jefferies have projected a low growth outlook for Indian IT companies in the coming years.
Limited budgets lead to limited expectations.
The financial services vertical remains a strong segment for some companies like TCS, but the overall environment remains negative.
Technology budgets are still focused on cost-cutting projects rather than long-term digital transformation. This not only impacts TCS's growth outlook but also puts its valuation (P/E ratio) under pressure.
