Tata Consultancy Services (TCS), a leading IT services provider, faces scrutiny from the UK's Business and Trade Committee following cyber attacks on three of its high-profile clients. The committee has demanded answers from TCS regarding its role as a service provider in the wake of these security breaches.

Cyber Attacks on Major Clients

The cyber attacks affected three prominent TCS clients:

1. Jaguar Land Rover (JLR)
2. Marks & Spencer (M&S)
3. Co-op

These incidents have raised concerns about TCS's involvement and the security measures in place for its client services.

Committee's Inquiry

The Business and Trade Committee has written to TCS seeking clarification on several key points:

• Service Scope: TCS has been asked to explain the extent of its services to the affected companies.
• Internal Investigations: The committee is requesting updates on any internal investigations conducted by TCS in response to these incidents.
• Contract Details: TCS is required to disclose the number and value of its service contracts, with a particular focus on companies operating in Critical National Infrastructure sectors.

M&S Incident Details

Media reports cited by the committee suggest that the cyber attack on M&S was triggered by a ransomware email sent from a TCS employee's account. This allegation adds a layer of complexity to the investigation and raises questions about internal security protocols at TCS.

Timeline of Attacks

• JLR: The cyber attack began on August 31, leading to production halts that have been extended until October 1.
• M&S and Co-op: These attacks occurred in April, predating the JLR incident.

TCS's Role and Response

TCS serves as a technology partner for all three affected companies. The company has been given until September 29 to respond to the committee's inquiries. The response from TCS is expected to shed light on its cybersecurity measures and the steps taken to prevent such incidents in the future.

Implications for TCS and the IT Services Industry

This scrutiny by the UK trade panel could have significant implications for TCS and potentially the broader IT services industry. It highlights the critical importance of robust cybersecurity measures in an era where digital services are deeply integrated into various sectors, including those considered part of Critical National Infrastructure.

As the investigation unfolds, it may lead to increased focus on cybersecurity practices and accountability in IT service partnerships, potentially influencing future regulations and industry standards in the UK and beyond.

Tata Consultancy Services (TCS), India's leading IT services provider, has seen its shares tumble to a 52-week low, extending a losing streak that has erased nearly ₹80,000 crore from its market capitalization over the past five trading sessions. The stock's decline reflects broader concerns in the Indian IT sector, particularly in light of new H-1B visa norms announced by the U.S. administration.

Sharp Decline from Peak

TCS shares have experienced a significant downturn, plummeting 35% from their record high of ₹4,494.00 reached in December. This sharp decline has positioned TCS as the worst performer on the Nifty IT index during this period. The stock was trading 2.3% lower at ₹2,966.50, breaking below key technical levels and trading below all major moving averages.

Technical Indicators

The stock's Relative Strength Index (RSI) has dropped to 32, approaching oversold territory. This technical indicator suggests that the stock may be undervalued at current levels, potentially setting the stage for a rebound if market sentiment improves.

Industry-Wide Impact

The decline in TCS shares is part of a broader trend affecting the Indian IT sector. Collectively, Indian IT companies have lost nearly ₹2 lakh crore in market capitalization following the announcement of new H-1B visa norms by the U.S. administration. These changes have raised concerns about the potential impact on the operational costs and business models of Indian IT firms heavily reliant on the U.S. market.

Analyst Sentiment Remains Mixed

Despite the recent downturn, analyst sentiment on TCS remains divided:

This mixed outlook reflects the uncertainty surrounding the company's near-term prospects in light of the challenging macro environment and regulatory changes.

JPMorgan Upgrade

In a notable development, JPMorgan has upgraded TCS to 'overweight' with a price target of ₹3,800.00. The upgrade is based on expectations of growth recovery from the second half of the financial year 2026. This long-term positive outlook suggests that some analysts believe in the company's ability to navigate current challenges and return to a growth trajectory.

Conclusion

The recent decline in TCS shares highlights the challenges facing the Indian IT sector, particularly in relation to changes in U.S. visa policies. While the short-term outlook remains uncertain, the mixed analyst sentiment and JPMorgan's upgrade indicate that opinions are divided on the company's long-term prospects. Investors will likely be watching closely for any signs of stabilization or recovery in the coming weeks.