Tata Consultancy Services Ltd. shares climbed as much as 4.11% to an intraday high of Rs 2,132 on the BSE on Friday after the information technology company reported its June-quarter earnings.
At around 9:20 a.m., the stock was trading at Rs 2,126, up 3.82% from the previous close. By comparison, the BSE Sensex gained 0.71% to trade at 77,481.
TCS reported a consolidated net profit of Rs 13,349 crore for the first quarter of FY27, down 2.7% from Rs 13,718 crore in the March quarter.
Revenue from operations increased 2.2% quarter-on-quarter to Rs 72,275 crore from Rs 70,698 crore in the preceding quarter.
Earnings before interest and tax (EBIT) fell 3.1% sequentially to Rs 17,317 crore. EBIT margin contracted by 130 basis points to 24%, compared with 25.3% in the previous quarter.
Commenting on the performance, Chief Executive Officer and Managing Director K Krithivasan said, "Q1FY27 reflects continued growth momentum and the strength of our strategic positioning, despite geopolitical and macro-economic headwinds. We delivered a strong order book of $9.5 billion, including a marquee AI-led transformation deal with SKF, while continuing to add clients across key revenue bands and scaling our AI business to a $2.6 billion annualised revenue run rate."
Chief Financial Officer Samir Seksaria said, "In Q1, we rolled out annual wage hikes, strengthened our partnership ecosystem, and targeted investments to enhance long-term competitiveness. We remain focused on building, acquiring, or partnering for AI-led capabilities while maintaining disciplined execution, industry leading profitability and return ratios."
The board declared an interim dividend of Rs 12 per equity share. July 15, 2026, has been fixed as the record date to determine eligible shareholders, while the dividend will be paid on July 31, 2026.
Brokerages Raise Targets, Maintain Positive Ratings
Japanese brokerage Nomura increased its FY27 and FY28 earnings estimates by 0.3% to 1% after factoring in the company's June-quarter performance.
"Our TP increases marginally, from Rs 2,570 to Rs 2,590, based on unchanged 16x FY28F EPS. The stock is trading at 12.6x FY28F EPS of nearly Rs 162," the brokerage said.
Motilal Oswal expects TCS to deliver a compound annual growth rate of about 3% in U.S. dollar revenue and about 6% in earnings per share between FY26 and FY28. The brokerage said management expects demand to improve in the second quarter, although growth is likely to remain confined to specific segments.
The brokerage said management commentary for the June quarter was stronger than anticipated. However, it reduced its FY27 margin estimate by 30 basis points to account for continued investments in artificial intelligence capabilities, partnerships and sales.
Motilal Oswal maintained its earnings estimates, reiterated its "Buy" rating and retained a target price of Rs 2,350, implying a potential upside of about 15%.
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