- TCS Q4 profit rose 29% sequentially, aided by absence of Labour Codes cost
- Revenue grew 5.5%, beating street estimates but growth outlook remains subdued
- Brokerages note weak BFSI growth and flat year-on-year deal bookings
Analaysts have largely appeared cautious on Tata Consultancy Services (TCS) Ltd. after the Indian IT major reported its fourth quarter earnings for the financial year ending March 2026.
TCS fourth quarter profitability rose as much as 29% on sequential basis, though much of it was aided by the company not having to incur anymore Labour Codes cost. Nevertheless, profit was in line with estimates whereas revenue, which saw a 5.5% uptick, was ahead of street estimates.
However, brokerages reacting to TCS' Q4 fineprint have pointed out that the company's growth outlook was rather subdued and even though the deal win momentum is still there, the underlying macro challenges persist.
Here is what brokerages are saying on TCS after their fourth quarter result.
ALSO READ: TCS Q4 Results: Profit Soars 29%; Revenue Beats Estimates
Jefferies on TCS
- Maintain Underperform; Cut TP to Rs 2275 from Rs 2350
- Subdued growth outlook
- Q4 revenue was in line, though margins missed estimates
- Weak growth in BFSI, flat YoY deal bookings
- AI-led revenue deflation due to higher exposure to application managed services should keep growth in check
- Margins are expected to remain range bound in absence of strong revenue growth
- Expect a subdued 5.5% EPS CAGR over FY26-29
Citi on TCS
- Maintain Sell with TP of Rs 2250
- Q4 EBIT Inline
- Expect low single-digit revenue growth to continue
- TCS Q4/commentary had data points supporting both the bullish and bearish views
- Continue to be cautious given high competitive intensity, continued impact of AI led productivity in existing business and GCC impact
- Relative preference for Infosys & HCL among large caps
Investec on TCS
- Maintain Buy; Cut TP to Rs 3020 from Rs 3700
- An inline quarter on revenue, EBIT margins and earnings
- Deal wins continue to remain robust
- EPS estimates are largely similar
- Cut P/E multiple by 20% as we now assume long term growth rates of 5%
- Believe risk-reward is highly favourable
ALSO READ: 400% Goodwill Surge: TCS Spent Big in FY26 — But Can It Turn Acquisitions Into Alpha?
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.
