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Tata Consultancy Services Limited
(TCS)
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Rating:77Outperform
Price Target:
₹2,868.00
▲(25.19% Upside)
Action:Reiterated
Date:10/13/26
The score is driven primarily by strong financial quality (low leverage, strong profitability, and solid cash generation) and supported by reasonable valuation with a high dividend yield. This is tempered by weaker technicals (below key longer-term moving averages with negative MACD) and earnings-call risks tied to slower demand and margin headwinds despite a healthy order book and growing AI contribution.
Positive Factors
Low financial leverage
TCS has substantial balance-sheet resilience because debt is very low relative to equity while assets and equity have continued to grow. This reduces financial risk, supports investment in strategic capabilities, and preserves flexibility through softer demand or margin pressure.
Negative Factors
Slowing growth and margin compression
The core business remains profitable, but slower revenue expansion and lower margins indicate that earlier growth and pricing advantages have moderated. If this persists, it could limit operating leverage, reduce earnings momentum, and make historical profitability levels harder to sustain.
Read all positive and negative factors
Positive Factors
Negative Factors
Low financial leverage
TCS has substantial balance-sheet resilience because debt is very low relative to equity while assets and equity have continued to grow. This reduces financial risk, supports investment in strategic capabilities, and preserves flexibility through softer demand or margin pressure.
Read all positive factors
Tata Consultancy Services Limited (TCS) vs. iShares MSCI India ETF (INDA)
Market Cap
₹8.90T
Dividend Yield4.43%
Average Volume (3M)318.05K
Price to Earnings (P/E)17.7
Beta (1Y)1.08
Revenue Growth9.92%
EPS Growth4.39%
CountryIN
Employees584,519
SectorGeneral
Sector StrengthN/A
IndustryInformation Technology Services
Share Statistics
EPS (TTM)142.64
Shares Outstanding3,618,087,400
10 Day Avg. Volume543,202
30 Day Avg. Volume318,053
Financial Highlights & Ratios
PEG Ratio12.79
Price to Book (P/B)7.95
Price to Sales (P/S)3.20
P/FCF Ratio16.90
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
₹2,158.60Price Target Upside-5.78% Downside
Rating ConsensusHold
Number of Analyst Covering5
EPS Forecast (FY)153.58
Revenue Forecast (FY)₹2.94T
Tata Consultancy Services Limited Business Overview & Revenue Model
Company Description
Tata Consultancy Services Limited (TCS) is a worldwide leader in delivering information technology and IT-enabled services. Its extensive operations are structured into distinct business segments, encompassing Banking, Financial Services and Insur...
How the Company Makes Money
TCS primarily makes money by delivering technology and business services to enterprise and government clients under contracted commercial arrangements. Its core revenue model is services-led: (1) IT Services and Consulting fees: TCS earns revenue ...
Tata Consultancy Services Limited Earnings Call Summary
Earnings Call Date:Oct 08, 2026
(Q2-2027)
| % Change Since: |
Next Earnings Date:Jan 14, 2027
Earnings Call Sentiment Positive
The call was broadly positive. TCS reported sequential international growth, broad-based expansion in core verticals, a $9.6 billion TCV, annualized AI revenue above $3.1 billion, improved attrition, and strong cash conversion. These positives were tempered by a selective demand environment, declines in Consumer Business and Energy, Resources and Utilities, project deferrals in India, and ongoing margin pressure from subcontractors, investments, seasonality, and potential MHP dilution.Positive Updates
International Growth Momentum
Revenue was ₹73.2 thousand crores, with constant-currency growth of 0.5% sequentially and 2.8% year on year. International revenue grew 1.2% sequentially in constant currency, with all international markets growing sequentially; the United Kingdom led at 3.5%, followed by North America and Continental Europe at 0.4% each.
Negative Updates
Selective Demand Environment
Management said the demand environment had not materially changed since the previous quarter, with discretionary programs that lack near-term value remaining under scrutiny.
Read all updates
Q2-2027 Updates
Positive
Negative
International Growth Momentum
Revenue was ₹73.2 thousand crores, with constant-currency growth of 0.5% sequentially and 2.8% year on year. International revenue grew 1.2% sequentially in constant currency, with all international markets growing sequentially; the United Kingdom led at 3.5%, followed by North America and Continental Europe at 0.4% each.
Read all positive updates
Company Guidance
TCS said it does not provide any specific revenue or earnings guidance, but management is confident that growth momentum will continue on a medium term basis; BSNL can provide a cushion for next couple of quarters, while Q3 furlough will be very similar to the previous years, with no major changes expected. Management expects North America revenue to recover and become healthy soon, consumer business to have a better next quarter, and Energy resources and utilities to recover in the medium term. The long term margin aspiration remains 26% to 28%, with a near term focus on inching up from 24%; MHP is likely to create about 50 basis points of dilution, depending on the timing of closure and when integration starts, alongside normal furlough seasonality and continued ecosystem investments. Data-center revenues are expected to start kicking in 18 to 24 months after a contract comes in.Tata Consultancy Services Limited Financial Statement Overview
Summary
Income Statement
84
Very Positive
Balance Sheet
90
Very Positive
Cash Flow
86
Very Positive
| Breakdown | TTM | Mar 2026 | Mar 2025 | Mar 2024 | Mar 2023 | Mar 2022 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 2.83T | 2.67T | 2.55T | 2.41T | 2.25T | 1.92T |
| Gross Profit | 1.00T | 825.67B | 1.10T | 1.08T | 1.06T | 914.87B |
| EBITDA | 742.99B | 722.65B | 713.69B | 677.30B | 626.62B | 568.57B |
| Net Income | 516.08B | 492.10B | 485.53B | 459.08B | 421.47B | 383.27B |
Balance Sheet | ||||||
| Total Assets | 1.91T | 1.82T | 1.60T | 1.46T | 1.44T | 1.42T |
| Cash, Cash Equivalents and Short-Term Investments | 546.40B | 466.78B | 408.72B | 435.83B | 455.26B | 445.97B |
| Total Debt | 119.34B | 112.83B | 93.92B | 80.21B | 76.88B | 78.18B |
| Total Liabilities | 707.88B | 737.68B | 638.58B | 551.30B | 524.45B | 516.68B |
| Stockholders Equity | 1.19T | 1.07T | 947.56B | 904.89B | 904.24B | 891.39B |
Cash Flow | ||||||
| Free Cash Flow | 507.67B | 505.06B | 449.71B | 416.64B | 388.65B | 369.54B |
| Operating Cash Flow | 547.62B | 542.85B | 489.08B | 443.38B | 419.65B | 399.49B |
| Investing Cash Flow | -141.83B | -159.34B | -23.18B | 60.26B | 390.00M | -8.97B |
| Financing Cash Flow | -423.01B | -412.35B | -474.38B | -485.36B | -478.78B | -335.81B |
Tata Consultancy Services Limited Technical Analysis
Positive
2291.00
Price Trends
2235.15
Positive
2216.26
Positive
2411.74
Positive
Market Momentum
77.78
Negative
73.42
Negative
94.61
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IN:TCS, the sentiment is Positive. The current price of 2291 is above the 20-day moving average (MA) of 2193.06, above the 50-day MA of 2235.15, and below the 200-day MA of 2411.74, indicating a bullish trend. The MACD of 77.78 indicates Negative momentum. The RSI at 73.42 is Negative, neither overbought nor oversold. The STOCH value of 94.61 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for IN:TCS.
Tata Consultancy Services Limited Peers Comparison
UnderperformOutperform
Sector (55)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | ₹3.86T | 21.04 | ― | 4.21% | 12.76% | 7.96% | |
77 Outperform | ₹8.90T | 17.73 | ― | 4.43% | 9.92% | 4.39% | |
74 Outperform | ₹4.59T | 15.75 | ― | 4.11% | 5.76% | 12.64% | |
73 Outperform | ₹1.28T | 26.78 | ― | 2.51% | 14.67% | 7.26% | |
73 Outperform | ₹1.74T | 29.42 | ― | 2.85% | 13.60% | 23.11% | |
71 Outperform | ₹1.87T | 14.84 | ― | 4.24% | 8.22% | -1.14% | |
55 Neutral | $6.65B | 3.83 | -15.92% | 6.20% | 10.91% | 7.18% |
* General Sector Average
IN:TCS
Tata Consultancy Services Limited
2,503.00
-444.42
-15.08%
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IN:TECHM
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Tata Consultancy Services Limited Corporate Events
TCS Publishes Q2 FY27 Audited Results in Leading Dailies
Oct 10, 2026
Tata Consultancy Services Limited has notified the Indian stock exchanges that it has published newspaper advertisements containing extracts of its audited consolidated and standalone financial results for the quarter and six‑month period en...
TCS Publishes Notice on Lost Share Certificates, Highlights Regulatory Compliance
Oct 10, 2026
Tata Consultancy Services Limited has notified stock exchanges that it has published a newspaper advertisement in Financial Express regarding the reported loss or misplacement of certain share certificates. The notice invites any objections or cla...
TCS Sees Minimal Impact From U.S. PERM Program Suspension on Hiring Plans
Oct 9, 2026
Tata Consultancy Services said it has noted the U.S. government’s announcement on the Permanent Labor Certification Program and will comply with any directives from the Department of Labor. The company emphasized that its U.S. workforce stra...
TCS Posts Audio Recording of Q2 FY27 Earnings Call for Investors
Oct 8, 2026
Tata Consultancy Services Limited has notified the stock exchanges that it has made available an audio recording of its earnings conference call for the quarter and six-month period ended September 30, 2026. The recording, hosted on the company...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.