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Shares of Tata Consultancy Services Ltd. (TCS) will be reacting to their September quarter results on Friday, October 9. The results, which were in-line with what the street was anticipating, were reported after market hours on Thursday.
48 analysts now have coverage on TCS, of which 29 still continue to maintain a "buy" rating on the stock, 13 analysts say "hold", while six have a "sell" rating on the stock.
Goldman Sachs has a "buy" rating with a price target of ₹2,210.
Most regions except India registering growth, broad-based growth across verticals, an increase in headcount for the third consecutive quarter, and less than expected headwinds from AI were some key positives from the results that Goldman Sachs noted.
However, flat margins on a sequential basis despite revenue growth in the international market and no wage hike headwind suggesting continued pressure due to reinvestments, deflation and competition, were some of the negatives that the investment banking firm noted.
Deal win growth is also negative which indicates that the revenue growth environment may remain tepid, according to Goldman Sachs.
Citi has maintained its "Sell" rating on TCS with a target of ₹1,840, which is among the lowest on the street for the stock.
Calling the quarter in-line, but sluggish, Citi said that TCS' aspiration of margins being in the 26% to 28% range keeps getting tougher.
The firm has lowered TCS' earnings estimates for financial year 2027-2029 by 1% to 2% and has also incorporated the Porsche IT deal in its estimates. It expects the muted low-single-digit revenue growth trajectory to continue.
"Expect growth challenges to continue to weigh on stock and sector multiples," Citi noted.
Nomura remains bullish on TCS as its "buy" rating comes with a price target of ₹2,630.
It said that deal bookings reported by TCS provide growth visibility but investments are likely to weigh on margins in financial year 2027 and that the macro uncertainties will weigh on the company's near-term growth outlook.
"As reinvestment for growth will continue, we expect margins to remain subdued in the near-term," Nomura's note said.
JPMorgan too is "overweight" on TCS and its rating comes with a price target of ₹2,300.
TCS highlighted that the demand environment has not changed much since the previous quarter and that discretionary programs remain under scrutiny.
While TCS intends to take margins higher from current levels in the second half of the year, JPMorgan said that this will be a function of how growth pans out since the second half is seasonally weak.
CLSA has a "hold" rating on TCS with a price target of ₹2,038.
A steady order book, sequential increase in headcount, AI revenue crossing $3 billion and international business growing were the key positives, according to CLSA, who noted that major areas of concerns remain around a revival in revenue growth and timing of EBIT margins going back to the 26% to 28% aspirational band.
CLSA has lowered its financial year 2027-2029 estimates by 1%-2% to account for higher investments but with the lack of growth revival visibility.
Shares of TCS ended off the highs of the day to close below the flatline at ₹2,077 ahead of the results announcement on Thursday. The stock is down 36% so far this year.
