During Q1 FY26, global conflicts, economic uncertainty, and supply chain bottlenecks led to higher cost pressure, project deferrals, delay in decision making, rescoping of work which ultimately led to lower revenue conversion. With pricing being largely stable and pent-up demand to follow once trade deals are announced between the US and its major trading partners, TCS believes that FY26 international growth to be better than FY25.
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Deven Choksey Report
We have revised our FY26E/FY27E EPS estimate of Tata Consultancy Services Ltd. by -1.7%/-3.6% respectively, led by lower revenue conversion on the back of reduced demand.
We value TCS at 25.0x Jun’27 EPS (~10-year average NTM P/E), implying a target price of Rs 4,067.
TCS is currently trading at a 1-year fwd. P/E of 23.7x, below its medium and long-term averages across tenures including one-year, three-year, five-year, seven-year and 10-year average NTM P/E.
We reiterate our “Buy” rating on the stock.
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