TCS market cap slips below ₹10 lakh crore for the first time after December 2020

Shares of Tata Consultancy Services Ltd. (TCS) fell as much as 5% on Thursday, February 12, in-line with the sell-off seen in IT and software-related companies worldwide.

With this, the market capitalisation of Tata Group's largest company has slipped below the mark of ₹10 lakh crore.

This is the first instance of the company's market capitalisation falling below the ₹10 lakh crore mark for the first time since December 2020, during the Covid-19 pandemic.

The broader weakness is visible across the sector. The Nifty IT index is down 10% year-to-date, while both TCS and Wipro have hit fresh 52-week lows.

Over the past five years, TCS has delivered a negative return of 12%, while Wipro has remained largely flat.

Global software cos crack YTD

Software majors have seen steep corrections this year, with ServiceNow down 30%, Salesforce falling 27%, Adobe declining 22%, EPAM down 11% and Globant slipping 12%.

While IT companies have successfully navigated past disruption cycles such as Y2K and the shift to cloud, the current cycle driven by artificial intelligence raises fresh concerns.

Unlike the cloud era, when Indian IT firms were challengers gaining market share, they are now incumbents facing disruption risks. AI's impact is also far more pervasive, extending beyond infrastructure to core service lines.

At the same time, emerging revenue streams remain small and exploratory, and are yet to meaningfully offset pressure in traditional businesses.

Shares of TCS had made a record high of ₹4,494 in December 2024. The stock has corrected 38% from those levels. At its peak, the Tata Group giant had a market capitalisation of over ₹16 lakh crore.