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TCS (Tata Consultancy Services) kicked off the day on a weak note. The stock slipped over 1 per cent to around Rs 3,094 on Monday (July 28, 2025), reacting to reports that India’s top IT services company is planning to lay off 12,000 employees this fiscal. It’s not a small number – it’s about 2 per cent of its workforce.
And the market doesn’t like surprises.
This move has sparked questions. Is it cost-cutting? Is growth slowing? Is it the AI effect creeping in? Whatever the reason, the street is jittery, and it showed in today’s price action.
Why the stock fell today
- The big trigger was the layoff news. TCS said it plans to reduce 12,000 jobs, citing a ‘skills mismatch’. But many read this as a red flag, especially since the company usually has one of the lowest attrition rates in the industry.
- The broader Nifty IT index was also down over 1 per cent, adding to the drag.
- Investors are wary that this could signal deeper issues—like weak demand or structural shifts in client behaviour.
Should you worry as an investor?
Here’s the thing: TCS isn’t broken. It still commands industry-leading return ratios and generates substantial free cash. Its moat is intact, and its global brand value continues to climb. However, near-term growth appears patchy, and the market dislikes uncertainty.
If you’re looking for quick upside, this might not be your moment. But if you’ve got a long runway and want a blue-chip compounder in your portfolio, TCS on a dip isn’t the worst idea.
The big swing factor? How the company manages this workforce rejig, and whether deal momentum picks up in the second half of the year.
About the company
Tata Consultancy Services (TCS) is the crown jewel of India’s IT sector. With operations in 46 countries, it offers everything from cloud solutions and AI services to core banking platforms. It caters to big global clients across banking, healthcare, retail and more. If there's a digital transformation underway, TCS is usually somewhere in the room.
Below is a table summarising the company’s fundamentals.
| Metric | Value |
|---|---|
| Market cap | Rs 11.34 lakh crore |
| P/E ratio | 23 |
| P/B ratio | 10.6 |
| ROE | 52.9 per cent |
| ROCE | 71.7 per cent |
| EPS | Rs 136.2 |
| Book value | Rs 295.5 |
| Dividend yield | 4 per cent |
Value Research Online ratings
- Overall: 4/5
- Quality: 10/10
- Growth: 6/10
- Valuation: 6/10
- Momentum: 1/10
Should TCS India be a part of your portfolio?
Markets will always have their ups and downs. That’s why basing your investment decisions on short-term results or market noise can be risky. True wealth is built by staying invested for the long haul.
At Value Research Stock Advisor, our analysts cut through the noise to help you focus on what really matters: Identifying long-term compounders. So instead of reacting to a single quarter, ask the bigger question: Can TCS become a wealth compounder over the next decade?
Explore Stock Advisor todayDisclaimer: This article was crafted with the aid of artificial intelligence and meticulously reviewed and edited by our human experts to ensure accuracy and provide valuable insights. It's intended for informational purposes only. We encourage you to conduct your own thorough research before making any investment decisions.
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