Tata Consultancy Services shares fall amid broader tech selloff

Shares of Tata Consultancy Services (TCS) were down on Tuesday, tracking a broader retreat in global technology equities amid rising concerns over growth prospects and margin pressures in the sector.

The decline in TCS stock comes as investors reassess valuations in large-cap IT services firms following a period of sustained gains. The company, one of India’s largest IT services providers, has faced scrutiny over its ability to sustain high-margin contracts amid rising wage costs and competitive pricing pressures in key markets.

TCS shares fell 2.3% in early trade, underperforming the broader Nifty 50 index, which was down 0.8%. The drop extended losses from the previous session, where the stock closed 3.1% lower. Analysts noted that the selloff reflects a broader rotation out of technology stocks, which have been among the top performers in India’s equity market this year.

The company’s recent quarterly results highlighted slower-than-expected revenue growth in its digital and cloud services segments, areas that have been critical to its growth strategy. While TCS maintained its full-year revenue guidance, concerns persist over execution risks in large transformational deals.

Broader market sentiment has also been dampened by rising U.S. Treasury yields and expectations of prolonged higher interest rates, which typically weigh on technology valuations due to their long-duration cash flows. The Nasdaq-100 index, a proxy for global tech stocks, was down 1.5% in overnight trading.

TCS did not immediately respond to requests for comment. The stock’s decline follows a mixed earnings season for India’s IT sector, with peers such as Infosys and Wipro also facing investor skepticism over near-term growth prospects.

For the year to date, TCS shares remain up 8.5%, though the recent pullback has pared some of those gains. Investors will be watching closely for updates on deal pipelines and client spending trends in the coming quarters.