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TCS Stock Update: Revenue Growth vs. Market Reactions
Tata Consultancy Services (TCS) shares opened Friday’s trading session on a subdued note, slipping 1.5% to a low of ₹3,015, despite the IT giant beating analysts’ expectations on Q3 revenue. By 9:20 AM, TCS was trading at ₹3,049, down 0.4%, while the Nifty IT index edged up 0.2% and the Nifty 50 benchmark rose slightly by 0.1% to 25,215.
Q3 Financial Performance Highlights
On Thursday, October 9, after market hours, TCS reported a 1.3% year-on-year (YoY) increase in net profit, posting ₹12,075 crore for the quarter ended September 2025, compared to ₹11,909 crore in Q2FY25.
Revenue also surpassed analyst expectations, with a 2.4% YoY increase to ₹65,799 crore for Q2FY26. According to Bloomberg estimates, analysts had predicted ₹65,267 crore in revenue and ₹12,559 crore in net profit. This revenue beat reflects continued demand for IT services, even amid challenging macroeconomic conditions.
From a technical perspective, TCS shares were observed testing short-term moving averages: the 20-Day Moving Average (20-DMA) at ₹3,031 and the 50-DMA at ₹3,053. These levels serve as immediate indicators for short-term momentum and investor sentiment.
- Current Price: ₹3,049
- Likely Target: ₹3,450 / ₹2,655
- Upside Potential: 13.2%
- Downside Risk: 13%
- Support Levels: ₹2,970; ₹2,870
- Resistance Levels: ₹3,170; ₹3,207; ₹3,270
The daily chart suggests that if TCS can sustain above the short-term moving averages, a pullback toward the 100-DMA at ₹3,207 could be attempted. Surpassing this level may open the door for a further rally toward the 200-DMA at ₹3,450, which has remained a significant long-term resistance point. TCS has been trading below the 100-DMA since January 13 and below the 200-DMA since February 7, indicating that long-term momentum has been subdued.
Medium-Term Momentum Signals
Despite short-term recovery attempts, key momentum oscillators in the medium-term chart remain bearish, suggesting that upside rallies could face selling pressure. TCS is expected to encounter interim resistance around ₹3,170 and ₹3,270, marking levels that have historically capped short-term gains.
For the overall trend to turn more favorable, TCS would need to break and trade consistently above ₹3,450. Until such a breakout occurs, any upward movement may risk being sold off. Conversely, on the downside, TCS could test its 100-Month Moving Average (100-MMA) at ₹2,655, implying a potential downside of around 13% from current levels. Immediate support is anticipated around the 20-DMA at ₹2,970 and further down near ₹2,870.
Market Reaction and Sentiment
The muted movement in TCS stock despite strong quarterly numbers highlights investor caution. While revenue beat signals operational strength, the stock’s inability to maintain gains above the short-term averages indicates that market participants are monitoring broader trends and waiting for sustained momentum before committing.
Analysts note that TCS continues to benefit from global IT demand, particularly in digital transformation, cloud services, and consulting. However, technical levels remain critical to monitor, as they often reflect trader psychology and short-term positioning.
Investors and market observers are paying attention to several crucial price levels:
- Support: ₹2,970; ₹2,870
- Resistance: ₹3,170; ₹3,207; ₹3,270
- Medium-term target: ₹3,450
- Long-term caution level: ₹2,655
Maintaining levels above 20-DMA and 50-DMA may encourage short-term optimism, while failure to breach resistance levels could result in consolidation or a minor pullback. Historical data indicates that crossing the 100-DMA is often a key step before attempting to test longer-term highs.
TCS’s Q3 earnings beat demonstrates resilience in revenue growth and profitability. Yet, technical charts signal caution, with short-term gains contingent on sustaining above moving averages and overcoming resistance levels. Medium-term momentum remains under pressure, suggesting that investors are closely watching price behavior relative to historical averages.
Overall, TCS stock illustrates the dual nature of market dynamics: strong fundamentals driving potential upside, while technical indicators caution against excessive optimism. For traders and market watchers, monitoring support and resistance levels remains crucial in understanding the stock’s near-term trajectory.
