TCS Share Price: Tata Group giant set for its worst annual performance since 2008

Tata Consultancy Services Ltd., the Tata Group flagship and India's largest IT services company, is headed for its worst annual stock performance since the Global Financial Crisis. TCS shares are down 21.4% in 2025, marking the steepest yearly decline in nearly 17 years.

The last time the stock saw a deeper fall was in 2008, when it had plunged 56% amid the global meltdown.

This also marks only the second negative year for TCS in the past eight years. The previous decline came in 2022, when the stock fell 12.9%. Before that, TCS had delivered uninterrupted annual gains between 2017 and 2021.

Year	TCS annual return (%)
2025	-21.4%
2024	8%
2023	16.5%
2022	-12.9%
2021	30.6%
2020	32.4%
2019	14.2%
2018	40.2%
2017	14.2%
2016	-2.9%
2015	-4.7%
2014	17.8%
2013	73%
2012	8.2%
2011	-0.4%
2010	55.4%
2009	214%
2008	-56%
2007	-12%
2006	43.52%
2005	27.51%

TCS AI growth

At its annual investor day held on December 17, TCS sought to refocus attention on its long term growth levers, particularly artificial intelligence.

The company reiterated its ambition to become the world's largest AI led technology services provider and, for the first time, disclosed granular metrics to highlight the scale of its AI business.

TCS said it has executed over 5,000 AI engagements so far, with AI related services generating about $1.5 billion in annualised revenue. This translates to roughly 5% of the company's overall revenue base, higher than the nearly 3% advanced AI revenue contribution reported by some peers.

AI revenues are growing at a much faster pace than the core business, rising 16.3% quarter on quarter and 38.2% year on year in constant currency terms. The company maintained its operating margin aspiration band of 26% to 28%, reiterating its focus on balancing growth, profitability and continued investment.

On $700 million acquisition

Alongside organic initiatives, TCS has stepped up its inorganic push. The company recently announced a $700 million all cash acquisition of AI services and advisory firm Coastal Cloud, a deal expected to close by January 31, 2026.

This is among TCS's largest acquisitions since its 2004 listing and signals a shift toward a more aggressive M&A strategy.

In October, TCS had acquired US based ListEngage MidCo for $72.8 million. Separately, the company has committed $6.5 billion over six years to build 1GW of data centre capacity.

IT stocks struggle to regain investor confidence

Broader sector headwinds, however, continue to weigh on sentiment. Indian IT stocks have struggled to regain investor confidence in 2025. While the Nifty 50 has risen nearly 10% this year, the Nifty IT index is down about 13%.

One key overhang has been regulatory uncertainty around US immigration policy. The Trump administration recently announced changes to the H-1B visa selection process, replacing the random lottery system with a weighted mechanism that prioritises higher skilled and higher paid workers.

In addition, a federal judge has allowed the administration to proceed with a proposed $1,00,000 fee on new H-1B visa applications. When the fee was first proposed in September, Sandip Agarwal, fund manager at Sowilo Investment Managers, estimated that the impact on Indian IT sector margins could be in the range of 6% to 7%.

Despite these challenges, analyst sentiment on TCS remains largely constructive. Of the 51 analysts tracking the stock, 36 maintain a 'Buy' rating, 10 recommend 'Hold', while five have a 'Sell' call.

Shares of TCS were trading 0.96% lower on Wednesday at ₹3,215.60. The stock has fallen about 6% over the past six months.