Tata Consultancy Services Ltd. share price target

TCS, through its wholly owned subsidiary TCS Netherlands B.V., has announced the acquisition of 100% equity shares of MHP Management und IT-Beratung GmbH (MHP), Porsche AG's Germany-based management and IT consulting subsidiary, for an enterprise value of EUR 320 million (approx. INR 3,550 Cr).

Revenue growth should accelerate from Q2 as the USD 9.5 billion TCV backlog converts, three of four soft verticals recover, and BFSI sustains. Margin trajectory is upward from the Q1 trough toward 25%+ exit.

TCS’ management is optimistic about demand recovery in Q2 on the back of pent-up demand and multiple net-new wins.

TCS reported 1QFY27 USD revenue of USD7.6b, up 0.4% QoQ in CC and above our estimate of flat QoQ CC growth. 1Q growth was led by Hi-tech/BFSI/regional markets, up 1.7%/1.6%/4.0% QoQ cc, while consumer/healthcare fell 4.0%/1.0% QoQ cc.

Reported PAT increased 12.1% YoY to Rs. 13,784cr, driven by margin expansion, favourable currency movement and reduced one-off expenses. TCS reported a TCV of $12bn in Q3FY26, of which $5.4bn came from North America. BFSI accounted for $3.9bn and the consumer business group $2.8bn. The company delivered strong single-digit revenue growth, supported by broadbased client additions, accelerating AI momentum, mega-deal wins and improved *over or under performance to benchmark index execution across key verticals. The impact from the Middle East conflict remains limited, confined mainly to regional operations and select travel and transportation clients. TCS is well positioned to benefit from enterprise AI adoption as clients move...

We maintain our BUY rating on the stock, with a target price of Rs 3,155/share, implying an upside of 22% from the CMP.

Q4FY26 revenue at INR 70,698 Cr (+5.4% QoQ reported, +1.2% QoQ CC), marking the third consecutive quarter of sequential growth after a prolonged deceleration.

AI-led transformation to drive next leg of growth: The company is witnessing strong traction in AI-led services, with annualised AI revenue crossing US$2.3 bn (+27% QoQ, US%1.8 bn in Q3) and increasing enterprise adoption across verticals. Strategic partnerships with OpenAI (100MW scalable to 1GW), AMD and hyperscalers, along with investments in HyperVault, position TCS at the centre of large-scale AI infrastructure & transformation opportunities. Management highlighted increasing deal sizes and faster conversion cycles as enterprises move from pilots to scaled deployments, implying superior revenue...

View on FY27 positive vis--vis FY26 due to exit momentum, order inflow and traction in new age services

TCS Q4's performance of 1.2% QoQ CC growth was largely in line with our estimates of 1.3% growth, aided by broad-based growth across all major geographies and segments except BFSI & CMT. AI revenue momentum continued with annualized revenue of USD 2.3 bn, up 27.8% QoQ and now forms 7.7% of revenue mix. However, geopolitical conflicts are not only having a direct impact on Travel and Transportation verticals, but delaying decisions within key verticals, especially BFSI. The vertical (BFSI) reported 2.9% USD growth in FY26, which will likely create a headwind in FY27E. The deal TCV growth remains weak (3.6% YoY) at 40.7b, despite the company winning 5...

TCS reported 4QFY26 USD revenue of USD7.6b, up 1.2% QoQ in CC (0.8% in organic cc terms), largely in line with our estimate of 1.5% growth. FY26 revenue declined 2.4% YoY CC.

Despite higher revenue, reported PAT declined 13.9% YoY to Rs. 10,720cr, primari- ly due to exceptional one-off items totalling Rs. 3,391cr, including restructuring expenses, the impact of new labour code and legal claim provision. TCS reported a TCV of $9.3bn in Q3FY26, of which $4.9bn came from North America. BFSI accounted for $3.8bn and the consumer business group $1.4bn. TCS displayed stable financial results in Q3, marked by healthy client engagement, strong deal momentum and growing leadership in AI-led solutions. Despite a challenging macro environment with geopolitical uncertainty and cautious spending, the company secured large contracts, enhanced its digital and cloud offerings and...

Revenue came in a tad short while margin was better than our estimates. AI and India drive growth QoQ

AI traction strengthens medium-term growth visibility: AI remains a key growth driver, with annualized AI revenues reaching US$1.8 bn (~6% of the revenues), up 17.3% QoQ in CC terms (implying US$ 600 mn for Q3), and strong sequential momentum across all NextGen service lines. Client conversations around AI-led productivity, modernization and efficiency continue to strengthen, supported by a growing skilled workforce of 217,000+ AI-trained employees who possess higher-order AI skills (~3x increase YoY). This positions TCS well to benefit from a gradual demand recovery and rising...

TCS demonstrated operational resilience amid macroeconomic headwinds through disciplined execution and strategic AI positioning. Revenue witnessed a muted 0.8% CC QoQ, reflecting cautious global spending. Topline grew 4.9% YoY, signaling the underlying recovery momentum driven by Consumer, EN&U, and Life Sciences verticals. Operating margin stood at 25.2% (excluding one-offs) backed by 80bps productivity gains which were neutralized by 50bps wage hikes and 50 bps brand partnership investments, indicating management's deliberate prioritization of longterm competitive positioning over near-term profitability expansion. AI revenue surged to USD 1.8bn annualized with 17.3% QoQ growth, backed by rapid -build projects delivering tangible value across industries rather than exploratory initiatives,...

TCS reported a stable operational performance in Q3FY26, although reported profitability was impacted by exceptional items.

We recommend a BUY rating on the stock.

TCS reported revenue of USD7.5b in 3QFY26, rising 0.8% QoQ in CC terms, above our estimate of 0.5%. Growth was led by regional market and others (up 4.6% QoQ CC).

Management expects growth in new age services to offset weakness in legacy/traditional business. Notably, AI expected to be margin accelerator via productivity, higher-value services & delivery efficiency. TCS is pivoting to acquisitions to speed up capability creation, as technology is changing rapidly due to GenAI and Agentic AI innovations. More acquisitive stance to strengthen AI advisory and domain depth (e.g., Coastal Cloud, ListEngage for Salesforce). Post-acquisition, TCS' portfolio now has all major Salesforce capabilities and market coverage....

We recommend a BUY on the stock and value the company at 23x multiple to its FY27E earnings to arrive at a TP of Rs 3,565/share, implying an upside of 11% from the CMP.