TCS shares slip 2%, down 12% in 4 straight sessions. What’s triggering the decline?

Shares of TCS, India's largest IT services company, plunged 2% to an intraday low of Rs 2,144 on the BSE on Monday as a surge in U.S. bond yields reignited concerns that the Federal Reserve may be forced to raise interest rates later this year. With today's decline, the stock has lost 12% over the last four trading sessions.

Higher U.S. bond yields and expectations of tighter monetary policy are generally seen as negative for Indian IT stocks. They tend to compress valuations of growth-oriented companies, raise concerns about slower technology spending by U.S. clients, encourage businesses to focus on cost optimization rather than expansionary IT investments, and can trigger foreign investor outflows from emerging markets.

The weakness in TCS also follows a sharp relief rally in IT stocks last week. The sector has remained under pressure through much of 2026 amid growing concerns that rapid advances in artificial intelligence could disrupt the traditional software services business model.

Should you buy TCS shares?

“We recommend avoiding TCS for now as the major trend is bearish,” Sudeep Shah, Vice President and Head of Technical & Derivatives Research at SBI Securities told ETMarkets. According to Shah, momentum indicators have weakened considerably, with the RSI turning lower after nearing the 60 level, suggesting fading bullish strength.

He also pointed out that the stock has slipped below the Bollinger Band midline, an important support level often tracked by technical analysts. With the latest decline, TCS has fallen below several key short- and long-term moving averages, indicating a weakening trend.

Harshal Dasani, Business Head at INVasset PMS, said the stock's technical setup has shifted from weakness to a test of a potential breakdown. According to him, the 9% decline following a 6.53% rebound in the last week suggests the earlier recovery was merely a dead-cat bounce rather than evidence of fresh buying interest. "When a large-cap stock gives up a relief rally this quickly, the market is not reacting to a single negative headline. It is repricing the entire low-growth IT model," Dasani said.

On the upside, he sees the Rs 2,400-2,450 range as a significant supply zone, since the recent recovery attempt stalled in that region. Dasani added that until TCS manages to reclaim this band with strong participation, any rallies are likely to face selling pressure.

TCS share price performance

TCS shares have fallen over 32% since the start of the year and about 37% in the last 1 year.

TCS reported a 12% year-on-year rise in consolidated net profit at Rs 13,718 crore for the fourth quarter, while revenue from operations increased 10% YoY to Rs 70,698 crore. The company also announced a final dividend of Rs 31 per share.

During the quarter, TCS secured three large deals, taking the total contract value to $12 billion for the period. On a quarter-on-quarter basis, revenue grew 5.4%, while constant currency growth came in at 1.2%, broadly in line with expectations. Operating margin for the January to March quarter stood at 25.3%, up 10 basis points from the previous quarter.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)