【India】TCS Share Price: TCS in Its Worst Phase in 4 Years, Why Are Shares Crashing After Ratan Tata’s Exit?

TCS shares have fallen 36% from their 52-week high. This decline is attributed to global economic pressures, geopolitical tensions, US visa policies, and trade tariffs. Additionally, reduced demand in the IT sector and limited budgets have impacted TCS’s growth outlook, leading to a continuous decline in its share price.

The performance of TCS shares is also weak technically. The share’s Relative Strength Index (RSI) has fallen to a level of 42.80, indicating it is in the oversold zone. This means investor confidence in the market has decreased and selling pressure persists.

The biggest challenge facing TCS is the new US H-1B visa policy. The US has proposed an annual fee of $100,000 for this visa, aimed at curbing mass recruitment and prioritizing highly skilled professionals. Since Indian IT companies like TCS rely on H-1B visas for onshore projects in the US, this could increase their operational costs and affect project delivery. Additionally, new trade tariffs imposed by the US have created an atmosphere of uncertainty in the market, turning investor sentiment negative.

Signs of weak demand in the IT sector are also evident from Accenture’s recent quarterly results. Accenture has given a weak growth outlook, clearly indicating that demand for large IT projects and discretionary spending remains sluggish. Brokerage houses like Citi and Jefferies also believe the possibility of strong growth for Indian IT companies in the coming years is very low.

Although the financial services sector remains strong for TCS, the overall economic environment is negative. Companies are now focusing on cost-cutting projects by reducing spending on long-term digital transformation. This is why pressure is being seen on TCS’s growth outlook, and its valuation (P/E ratio) is also being negatively impacted.