According to Antique Stock Broking, the valuation of TCS shares has become more reasonable as a result of the stock’s roughly 30% correction from its peak during the past year.
With sequential constant currency (CC) revenue degrowth of 0.8%, which was somewhat less than the street’s forecast of 0.2%, Tata Consultancy Services Ltd. (TCS) reported disappointing March quarter results. TCS’s profit margin also narrowly missed analyst projections. Despite this, its deal velocity remained robust at $12.2 billion, above estimates of $10–11 billion.
A few stock analysts reduced their goals after the Q4 loss, but most have kept their ‘Buy’ ratings on the stock.
Nuvama claimed that the BSNL ramp-down had an effect on TCS’s revenue growth. It stated that TCS management anticipates that the current uncertainty caused by US tariffs will pass and that the company’s impressive deal-wins over the past two quarters should enable it to report better growth from developed markets in FY26 than in FY25.
We make small revisions to our FY26E/27E EPS, which is down 2.4% and 2.7%, respectively. With a target of Rs 4,050 (formerly Rs 4,200), we maintain our valuation of TCS at 25 times FY27E PE. Hold onto “BUY” at appealing prices (4% dividend yield).
Though it increased its target price to Rs 3,950, which indicates a PE multiple of 24 times based on the FY27E EPS of Rs 164.60, Choice Broking kept its “Buy” recommendation on the stock. Nomura India lowered its objective for TCS from Rs 3,890 to Rs 3,490. “Changes,” it said. It maintained its ‘Neutral’ rating on TCS and stated that growth visibility for FY26 is still unclear.
According to Antique Stock Broking, the valuation of TCS shares has become more reasonable as a result of the company’s 30% correction from its peak during the previous year.
“The stock is presently trading at a forward PE of 22 times, which is somewhat higher than the highest premium of 30% in April 2020 compared to the Nifty IT index. We anticipate that TCS’s current valuations will balance out the short-term earnings volatility brought on by global uncertainty, as it is one of the best-managed Indian IT services businesses,” Antique stated.
This firm has raised TCS from ‘Hold’ to ‘Buy’ because of its low valuation and a slow comeback in growth starting in 2HFY26.
“Following the recent correction, there is a 28 per cent upside from the current market price, with our earnings estimates and target price of Rs 4,150 unchanged,” Antique stated.
