TCS shares tumble 4%, wipe out Rs 35,000 crore after N Chandrasekaran resigns. What should investors do?

Shares of Tata Consultancy Services (TCS) tumbled around 4% on Wednesday, recording the biggest single day plunge in more than two months after Tata Sons Chairman N Chandrasekaran resigned.

The shares of India’s largest IT services provider closed at around Rs 2,350 apiece on NSE, wiping off around Rs 35,000 crore from its market capitalisation and dragging it down to Rs 8.5 lakh crore. It closed as the top loser on benchmark indices Sensex and Nifty, as well as sectoral index Nifty IT which it pulled down 1.5%, making it the top sectoral loser.

N Chandrasekaran on Wednesday resigned as Tata Sons Chairman, after one Board member did not support the proposal to extend his tenure. The Economic Times was the first to break the development this morning. Chandrasekaran’s current tenure as chairman of Tata Sons ends on February 20 next year.


“Tata Sons is a very large institution and there are many strategic projects that are under critical stages of execution,” he said. “It is not only necessary to have a leader in place to lead the Group beyond Feb 2027, but also clarity on leadership is important for employees, investors, partners and other stakeholders…Under these circumstances, earlier today, I have communicated to the Tata Sons Board, that I have decided not to offer myself for reappointment when my term ends,” he added.

Following this, the shares of salt-to-airlines conglomerate Tata Group companies sharply tumbled. TCS, which has the largest market capitalisation in the Tata pack, recorded the sharpest decline in the pack.

Also read | N Chandrasekaran resigns as chairman of Tata Sons before AGM

Chandrasekaran's long association with TCS

Chandrasekaran has been closely associated with TCS. He joined the Tata Group in 1987 as an intern at TCS and spent his entire corporate career ⁠at the IT giant, rising through the ranks to become CEO in 2009, before taking over as Tata Sons chair in 2017.

Analysts however noted that the impact of Chandrasekaran’s resignation is expected to be a knee-jerk reaction as he has been at the helm for a long time. “We have witnessed such uncertain periods for Tata Group, when Ratan Tata had taken over in early 1990s and more recently during the Cyrus Mistry imbroglio, but it has always managed to steer through. So this time it shouldn’t be any different,” said market analyst Ambareesh Baliga.

What lies ahead for TCS shares?

Evaluating the stock's technical landscape, the daily chart shows TCS is trading within a prolonged secondary downtrend following a primary distribution phase from its peaks above Rs 4,400, said Mayank Jain, Market Analyst, Share.Market by PhonePe. He added that the price action is currently attempting a short-term base-building phase near the Rs 2,000–2,300 structural support zone.

Technical stability in the near term often depends on holding above these multi-month swing lows, Jain explained, adding that on the upside, the Rs 2,670–2,700 region—where the 200-day Simple Moving Average (SMA) currently aligns—serves as a primary overhead dynamic resistance zone. A sustained daily close above the Rs 3,000–3,180 horizontal resistance confluence would be required to signal a structural trend reversal, he added.

Also read | Post Chandrasekaran, the head that wears the Tata crown won't rest easy

(With inputs from agencies)

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