NDTV Profit's special research section collates quality and in-depth equity and economy research reports from across India's top brokerages, asset managers and research agencies. These reports offer NDTV Profit's subscribers an opportunity to expand their understanding of companies, sectors and the economy.
IDBI Capital Report
In this Q4 FY26 results review note, IDBI Capital has maintained its rating on Tata Consultancy Services Ltd. to Buy, with a reduced target price of Rs 3,137, valuing at 17 times FY28E earnings per share, which implies a potential upside of 21%.
TCS delivered a resilient performance in FY26 despite global uncertainty. In Q4, company reported steady sequential growth (~1.2% constant currency), supported by broad-based demand across geographies and strong deal wins worth $12 billion TCV, including multiple mega deals.
However, full-year revenue declined 2.4% in CC term, reflecting macro pressures and cautious client spending.
Margins remained a key strength, with operating margin at ~25% (4-year high), driven by productivity, pricing discipline, and currency tailwinds, despite continued investments in AI, partnerships, and talent.
Cash flows were robust, supporting dividends and future growth investments. AI is emerging as the central growth driver, with annualized AI revenues crossing $2.3 billion.
The company is seeing a shift from experimentation to scaled AI adoption, helping clients modernize systems, reduce costs, and improve efficiency. Client behaviour remains cautious but stable, with increasing vendor consolidation and long-term deal commitments.
Management is optimistic for FY27, expecting gradual recovery led by AI-led transformation, strong order book, and improving demand, though margin pressure may persist due to wage hikes and continued investments.
Click on the attachment to read the full report:
DISCLAIMER
This report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit.
Users have no license to copy, modify, or distribute the content without permission of the Original Owner.
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.
