TCS Share Price Falls Nearly 5%: Stock Hits Day’s Low After Chandrasekaran Reappointment Decision

Tata Consultancy Services shares fell nearly 5 percent on the BSE on Wednesday, August 12, after Tata Sons chairman N Chandrasekaran said he would not offer himself for reappointment when his current term ends on February 20, 2027.

TCS shares fell as much as 4.84 percent to Rs 2,322 apiece during the session. At 11:00 am, the stock was trading 3.47 percent lower at Rs 2,355.60, while the BSE Sensex was down 0.67 percent at 77,631. By 11:38 am, TCS was quoted at Rs 2,349.30, down 3.94 percent.

At 11:54 am, TCS shares were trading at Rs 2,327.30, down 4.84 percent or Rs 118.40 on the BSE.

Chandrasekaran communicated his decision to the Tata Sons board ahead of the company's August 18 annual general meeting and asked the board to decide on his successor soon to ensure a smooth transition.

In a statement, Chandrasekaran said he had completed 40 years of professional life at the Tata Group and described leading Tata Sons as a significant privilege carrying deep responsibility.

"I have completed 40 years of professional life at the Tata Group. I am grateful for the immensely satisfying opportunity to contribute to this venerable institution. Leading Tata Sons over the past decade has been a great honour and a profound responsibility," he said.

Why The Reappointment Did Not Go Through

Chandrasekaran said his current tenure as chairman of Tata Sons ends on February 20, 2027. He said the Sir Dorabji Tata Trust and Sir Ratan Tata Trust had unanimously resolved and recommended extending his term by five years. The proposal was subsequently recorded and recommended by the Tata Sons Nomination and Remuneration Committee and the board.

According to Chandrasekaran, the resolution was tabled at the Tata Sons board meeting on February 24, 2026, but was not carried through after one board member did not support it.

"However, the proposal was not carried through because one of the Board Members did not support it, and in the absence of unanimous support, I chose to defer the decision," he said.

Chandrasekaran said six months had passed since that board meeting without a resolution being reached.

"It has been 6 months since that Board meeting, and no resolution has been reached till date," he said.

Leadership Clarity Cited As Key Factor

Chandrasekaran said Tata Sons is a large institution with several strategic projects at critical stages of execution, making clarity on leadership important for employees, investors, partners and other stakeholders.

"Tata Sons is a very large institution and there are many strategic projects that are under critical stages of execution. 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," Chandrasekaran said.

"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 on Feb 20, 2027," he said.

Chandrasekaran added that he had asked the board to decide on his successor soon to ensure a smooth transition.

"I have asked the Board to decide on the succession soon to ensure a proper transition. I am grateful for the support of all stakeholders," he said.

Natarajan Chandrasekaran, popularly known as Chandra, became chairman of Tata Sons in 2017. He joined TCS as an intern in 1987 and went on to become its CEO in 2009 before taking charge of Tata Sons.

TCS Q1 FY 2026-27 Performance

The development comes shortly after TCS reported a mixed performance for the April-June quarter of FY27, with net profit and operating margins declining sequentially despite modest revenue growth.

The IT major's consolidated net profit fell 2.7 percent quarter-on-quarter to Rs 13,349 crore, compared with Rs 13,718 crore in the previous quarter. Revenue from operations rose 2.2 percent to Rs 72,275 crore, from Rs 70,698 crore.

EBIT declined 3.1 percent QoQ to Rs 17,317 crore, from Rs 17,870 crore, while the EBIT margin narrowed to 24 percent from 25.3 percent.

TCS declared a dividend of Rs 12 per share, below the market estimate of Rs 19. The record date was July 15, 2026, while the payout was scheduled for July 31, 2026.

Employee attrition stood at 13.6 percent during the quarter, above the Bloomberg consensus estimate of 11.5 percent. Total headcount stood at 593,798 at the end of the quarter.

TCS reported 0.4 percent QoQ constant-currency revenue growth, in line with market expectations. Total contract value stood at $9.5 billion, including an $800 million deal with SKF.

Among key verticals, BFSI revenue grew 1.6 percent sequentially, while India revenue increased 7.6 percent. Consumer business declined 4 percent, life sciences and healthcare fell 1 percent, manufacturing slipped 0.5 percent and North America revenue declined 0.4 percent.

Commenting on the performance, K Krithivasan, CEO and managing director of TCS, said the first quarter of FY27 reflected continued growth momentum, highlighting the $9.5 billion order book, the AI-led transformation deal with SKF, continued client additions and the scaling of TCS' AI business to an annualised revenue run rate of $2.6 billion.

Also Read - Tata Group Stocks Lose Rs 46,000 Crore In Market Value As N Chandrasekaran Won't Seek Reappointment