Tata Consultancy Services Ltd. shares will be in focus as the IT major reported its September quarter results, with investors assessing the outlook for revenue growth, margins, and artificial intelligence-led business opportunities.
Brokerage firms remained divided on this stock, with major concerns over demand and margin pressures weighing on earnings expectations.
During the previous session, Thursday, Oct. 8, the stock closed at Rs 2,076 apiece, down 0.21%, on the NSE.
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TCS September Quarter Results
TCS reported a 4% sequential increase in net profit to Rs 13,884 crore in the September quarter, compared with Rs 13,349 crore in the previous quarter. Revenue rose 1.3% quarter-on-quarter to Rs 73,188 crore from Rs 72,275 crore.
Ebit increased 1.4% to Rs 17,553 crore from Rs 17,317 crore sequentially; however, the Ebit margin narrowed to 24% from 24.38% in the previous quarter, reflecting continued pressure on profitability.
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What Are Brokerages Saying About TCS?
Brokerages have mixed views on TCS, with concerns over growth and margins keeping expectations in check. Motilal Oswal maintained a Buy rating with a target price of Rs 2,400, citing improving international growth; however, it warned that the margins would remain under pressure due to investments and higher subcontracting costs.
Emkay Global Financial Services maintained its Add rating with a target price of Rs 2,600, despite softer-than-expected performance.
Jefferies retained its Underperform rating and Rs 1,800 target, citing weak growth across key markets and rising margin pressure.
Kotak Securities maintained an Add rating but reduced the target price to Rs 2,320 from Rs 2,450 earlier. The brokerage flagged margin risks from growth investments and muted deal wins.
Citi retained a Sell rating and also lowered the target price to Rs 1,840 from Rs 1,875, expecting subdued revenue growth.
JPMorgan maintained the Overweight rating with a target price of Rs 2,300, while cautioning that demand uncertainty could make margin improvement in the second half dependent on growth.
TCS Technical Outlook
Hitesh Tailor, technical research analyst at Choice Broking, said TCS continues to display a bearish structure across multiple timeframes. The stock is trading below key daily, weekly, and monthly Exponential Moving Averages, while its weekly Relative Strength Index is around 35-40, indicating sustained negative momentum.
The Rs 2,000-2,020 range is the immediate support zone. A decisive weekly close below Rs 2,000 could expose the stock to further downside towards Rs 1,850 and Rs 1,750.
On the upside, any rebound could face resistance between Rs 2,250 and Rs 2,330, where previous breakdown levels coincide with declining weekly moving averages.
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