TCS Q4 Results Review — IDBI Capital Upgrades Rating To 'Buy', Sees Upto 15% Upside

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IDBI Capital Report

Despite ongoing macro uncertainty international business grew 0.6% QoQ, however, growth was impacted by regional markets and BSNL deal ramp down. Management is in unison with the street’s expectation of short lived fickleness in macros and re-iterated FY26 to be better than FY25.

This confidence is stemmed from strong deal bookings (12.2 billion, +20% QoQ), no major project cancellations, scaling of Gen AI projects from Use cases and no cuts in discretionary spends. Having said that, the management witnessed some softness in retail, insurance, consumer and auto segments due to recent tariff wars.

TCS being a market leader with their strong managed portfolio, Gen AI projects and workforce strength would continue to be the same. Any early improvement in demand environment would reflect in their topline. With the near term softness already reflected in the price, we upgrade our rating to Buy from Hold by valuing the company at 24.8x FY27E with target price of Rs 3,733, currently trading at 21.6x.

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