Intraday Price Action and Market Context
On 4 Feb 2026, Tera Software Ltd (Stock ID: 250836) recorded a high of ₹454.7, marking a 5% increase from its previous close and reaching the maximum permissible daily price band. The last traded price (LTP) stood at ₹451.25, reflecting a solid 4.24% gain for the day. This performance starkly contrasted with the IT - Software sector’s decline of 4.96% and the Sensex’s modest 0.23% rise, underscoring the stock’s relative strength.
The stock opened with a gap-up of approximately 5%, signalling strong overnight sentiment. Despite the high volatility, the weighted average price indicated that a significant volume of trades occurred closer to the day’s low price of ₹435.95, suggesting some profit booking or cautious trading near the upper circuit.
Volume and Liquidity Dynamics
Trading volumes for the day were moderate, with total traded volume at 0.09776 lakh shares and turnover amounting to ₹0.44 crore. While the stock is classified as micro-cap with a market capitalisation of ₹564.79 crore, liquidity remains adequate for trades up to ₹0.03 crore based on 2% of the 5-day average traded value. However, delivery volumes have declined by 15.37% compared to the 5-day average, indicating a drop in investor participation despite the price rally.
Technical and Moving Average Analysis
Technically, Tera Software Ltd’s price is trading above its 5-day, 20-day, 50-day, and 200-day moving averages, signalling short- to long-term bullish momentum. However, it remains below the 100-day moving average, suggesting some resistance at intermediate-term levels. The stock has recorded gains for three consecutive sessions, accumulating a 14.93% return over this period, which further confirms the positive trend.
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Mojo Score and Analyst Ratings
Tera Software Ltd holds a Mojo Score of 78.0, placing it in the 'Buy' grade category as of 5 Dec 2025, a slight downgrade from its previous 'Strong Buy' status. This adjustment reflects a more cautious outlook amid recent price volatility and sector headwinds. The company’s market cap grade is 4, consistent with its micro-cap classification, which often entails higher risk but also potential for outsized returns.
Sectoral and Peer Comparison
While the broader IT - Software sector has experienced a downturn, Tera Software Ltd’s outperformance by 9.17% relative to its sector peers is noteworthy. This divergence may be attributed to company-specific developments or renewed investor interest in its growth prospects. However, the falling investor participation and delivery volume caution against excessive exuberance, signalling that the rally may be driven more by short-term trading activity than sustained institutional buying.
Regulatory and Market Mechanism Impact
The stock’s upper circuit hit triggered an automatic regulatory freeze on further buying, a mechanism designed to curb excessive volatility and speculative trading. This freeze temporarily halts fresh orders, allowing the market to absorb the price movement and prevent disorderly trading. The unfilled demand at the upper circuit price level indicates strong latent buying interest, which could fuel further gains once the freeze is lifted.
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Investment Implications and Outlook
For investors, Tera Software Ltd’s recent price action presents a mixed picture. The strong buying pressure and upper circuit hit demonstrate renewed market confidence and potential for further upside. However, the micro-cap status, declining delivery volumes, and the stock’s position below the 100-day moving average counsel prudence. Investors should monitor upcoming quarterly results, sector trends, and any corporate announcements that could influence the stock’s trajectory.
Given the current momentum, short-term traders may find opportunities in the stock’s volatility, while long-term investors should weigh the company’s fundamentals and valuation metrics carefully before committing fresh capital.
Company Profile and Market Capitalisation
Tera Software Ltd operates within the Computers - Software & Consulting industry, providing specialised software solutions and consulting services. With a market capitalisation of ₹564.79 crore, it is classified as a micro-cap entity, which typically entails higher growth potential but also elevated risk compared to larger peers. The company’s recent performance and analyst ratings suggest it remains a stock to watch within its sector.
Summary of Key Metrics
To recap, on 4 Feb 2026:
- Stock price surged to ₹454.7, hitting the 5% upper circuit limit
- Intraday gain of 4.2%, outperforming sector by 9.17%
- Three-day consecutive gain of 14.93%
- Moderate traded volume of 0.09776 lakh shares with turnover of ₹0.44 crore
- Mojo Score of 78.0 with a 'Buy' rating
- Trading above key moving averages except the 100-day average
These figures highlight the stock’s recent strength amid a challenging sector environment.
Conclusion
Tera Software Ltd’s upper circuit hit on 4 Feb 2026 underscores a significant shift in market sentiment, driven by strong buying interest and positive technical signals. While the rally is encouraging, investors should remain mindful of the stock’s micro-cap nature and sector headwinds. The regulatory freeze following the circuit hit serves as a reminder of the volatility inherent in such price movements. Careful analysis of fundamentals and market conditions will be essential for making informed investment decisions going forward.
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