TCS Q1 Results Review — 'Buy' The Stock Maintains Systematix On Robust Pipeline, Compelling Valuations

TCS has consistently gained market share across tech shifts over the years, backed by a diversified service mix, deep client trust, and strong domain expertise. The brokerage sees it as a key partner in clients’ cost takeout and digital transformation efforts..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..Systematix Research Report.Tata Consultancy Services Ltd. reported revenue decline in Q1, primarily due to the ramp-down in BSNL deal. Barring India, the company posted a disappointing 0.5% QoQ revenue decline. The weakness is attributable to the cautious discretionary spending in international markets. Clients are taking longer to finalize decisions, with near-term demand staying soft due to macro volatility and a sharper focus on return-driven investments. Management expects a rebound in FY26 growth, banking on visibility from robust H2 FY25 total contract value numbers, despite no new mega deal wins (exceeded guided range of $7-9 billion), signs of reviving discretionary spends in the BFSI and retail verticals,signs of recovery in the US financial services vertical, andpositive bias in clients’ CY25 IT budgets. Management believes the medium-term drivers for technology spend are intact and is upbeat on revenue growth for FY26 versus FY25. .We have revised our USD revenue CAGR estimate for FY25–27E downward from 6.4% to 4.6%, factoring in near-term softness and a cautious demand outlook. EPS estimates for FY26E/FY27E have been trimmed by 1.9%/2.7%, while Ebit margin assumptions remain largely unchanged. Accordingly, we lower our target price to Rs 3,908 (from Rs 4,017), based on an unchanged 25x FY27E EPS. At 23.6x 1-year forward earnings, TCS trades at a 4% discount to its 10- year average—offering a favorable entry point. .Key risks: Abrupt exit/s from the leadership team,pressure on client discretionary spend sustaining in FY26/FY27, non-encouraging outcomes of cost-saving programs..Click on the attachment to read the full report:.TCS Q1 Results Review: Buy, Sell Or Hold? Analysts Mostly Bullish Despite Weak Earnings.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 Q1 Results Review — 'Buy' The Stock Maintains Systematix On Robust Pipeline, Compelling Valuations

At 23.6x 1-year forward multiple, TCS trades at a 4% discount to its average 10-year historical valuation

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