TCS Gets 'Buy' Upgrade From IDBI Capital Post Q2 Results; Sees 22% Upside — Here's Why

Despite macro uncertainty and tight discretionary budgets, TCS continues to benefit from vendor consolidation/strong participation in large-scale AI-led engagements..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.Tata Consultancy Services Ltd. reported a 0.8% QoQ growth and 3.3% YoY decline in constant currency revenue driven by strong momentum across most verticals except Consumer Business and geographies excluding the UK. Operating margin expanded 70bps sequentially to 25.2% (excluding one-time severance), aided by currency tailwinds, utilization gains, and pyramid rebalancing, partially offset by wage hikes and ongoing AI investments. Net margin stood at 19.6%. TCS recorded its highest-ever quarterly TCV of $10 billion (+16% YoY), with BFSI at $3.2 billion and Consumer Business at $1.8 billion. Management reiterated that FY26 international revenue growth will surpass FY25, supported by deal ramp-ups and robust demand in AI-led transformation, modernization, and cost-optimization programs. Despite macro uncertainty and tight discretionary budgets, TCS continues to benefit from vendor consolidation/strong participation in large-scale AI-led engagements. Investments in AI infrastructure (sovereign data center up to 1GW) and internal upskilling (160K AItrained associates) reinforce its vision to become the world’s largest AI-led technology services company. Despite weak macros/tariff-related and H1B issues, improving deal conversion/better utilization, we upgrade our rating to Buy, with a same target price of Rs 3,733 (due to sharp correction in price), valuing at 24.9x FY27E earnings per share..Click on the attachment to read the full report:.TCS Shares Can Zoom 21% Says Yes Securities Post Q1 Revenue, Margin Beat; 1GW Data Center Foray.DISCLAIMERThis 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.

TCS Gets 'Buy' Upgrade From IDBI Capital Post Q2 Results; Sees 22% Upside — Here's Why

Despite weak macros/tariff-related and H1B issues, improving deal conversion/better utilization, IDBI Capital upgrade TCS' rating to 'Buy'.

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