Earlier this week, India’s largest lender SBI overtook TCS to become the country’s fourth-largest listed company by market capitalisation, buoyed by its strong Q3 earnings performance.
The bearish sentiment stems from US artificial intelligence startup Anthropic, which unveiled a new tool designed specifically for corporate legal teams earlier this month. Anthropic, the company behind the Claude chatbot, said the product is capable of automating several legal functions, including contract reviews, non-disclosure agreement triage, compliance workflows, legal brief preparation and standardised responses.
The selloff was broad-based, with the Nifty IT index plunging nearly 4% as heavyweights such as Infosys, HCLTech, Mphasis and Wipro tumbled 4–5% each, dragging the entire sector deep into the red. The rout wiped out roughly Rs 1.3 lakh crore in market capitalisation, pulling the combined value of Nifty IT constituents down to around Rs 27.6 lakh crore.
“Tech stocks, reeling under the Anthropic shock, are unlikely to recover soon,” warned Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Investments. “Indian IT will continue to struggle. The switch from IT to other segments will help performing stocks in performing sectors.”
Last week, international brokerage Jefferies was among the first to label the market reaction a “SaaSpocalypse”, noting a rapid shift in sentiment from ‘AI helps these companies’ to ‘AI replaces these companies.” Jeffrey Favuzza from Jefferies’ equity trading desk described the mood as outright panic. “Trading is very much ‘get me out’ style selling,” he said, according to Bloomberg.
TCS Q3 earnings snapshot
The company reported a 14% year-on-year (YoY) decline in its consolidated net profit for the December quarter. The company posted a profit after tax (PAT) of Rs 10,657 crore in Q3FY26, compared to Rs 12,380 crore in the same period last year.
TCS registered a 5% YoY increase in revenue from operations, which rose to Rs 67,087 crore from Rs 63,973 crore in the year-ago quarter.
On a sequential basis, however, the company’s PAT dropped 12% from Rs 12,075 crore in Q2FY26. Revenue during the quarter grew 2% sequentially, compared with Rs 65,799 crore reported in the July–September quarter.
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