Kotak Inst Eqt on TCS
Buy, TP Rs 3100
Delivered an in-line quarter, aided by improved momentum in the international business and stable profitability.
Bookings were strong and included three mega deals.
TCS appears to be moving out of a patch of unusual underperformance, driven by BSNL deal ramp-down, insourcing and program completions.
Stock price has declined by 19% in past year, underperforming peers during a cyclically weak phase.
FY2027 should see a meaningful narrowing of the growth differential with peers.
GenAI readiness is also becoming more visible through targeted workforce interventions, broader AI investments and a sharper consulting push
Remain constructive & raise EPS by 3% on revised currency assumptions.
CITI On TCS
Sell, TP Rs 2250
Reported inline Q4 EBIT; FY26 revenues -2.4% yoy cc.
Forward looking indicators –
(a) TTM TCV +3.6% yoy;
(b) Headcount -4% yoy; (c) Management commentary – Getting into next year with positivity & confidence; they see a regular Q1 and Q2.
Expect low single-digit revenue growth to continue
Debate is likely to continue – TCS Q4/commentary had data points supporting both the bullish and bearish views
GS on TCS
Buy, TP Rs 2710
4QFY26 had no major surprises.
Key positives
(i) positive sequential revenue growth across all but one vertical;
(ii) Strong deal wins in 4Q, including 3 mega deals;
(iii) Modest headcount growth and earlier than expected wage hike;
(iv) company calling out growth in mid/large-sized accounts with early signs of stability;
(v) no discernible negative impact of AI on revenue growth, though re-investment to build capabilities is causing potential margin drag.
A few negatives
(i) No improvement in growth momentum, with +0.8% qoq organic growth for 3 quarters in a row;
(ii) Miss to guidance of better FY26 vs FY25 for int’l markets, with two consecutive years of close to 0% revenue growth and limited color on FY27 growth outlook;
(iii) Limited margin expansion despite strong Fx tailwinds.
CLSA on TCS
O-P, TP Rs 2985
4QFY26 was largely in line on revenues and Ebit margins and slightly better on order booking QoQ but not YoY given 4Q renewal seasonality.
Gen AI revenue at an annualised US$2.3bn, up 28% QoQ and 7.5% of overall revenue, implies AI should be a net tailwind in the medium to long term
On Middle East (ME) crisis, impact is limited to ME geography and travel vertical up to now, and c. 0.8% CC QoQ organic revenue growth in 4Q (like 2Q/3Q) does imply a still volatile macro at this juncture.
An attractive FCF yield of 6% (even higher than the Covid bottom) and a steep discount to Indian IT peers on valuations keeps us O-PF
JPM on TCS
OW, TP Rs 3150
Delivered a solid 4Q with a small revenue beat, stable margins, & strong deal wins, while commentary points to gradual improvement into FY27
International growth improved to 2% CC YY, demand is stabilising across Consumer, HiTech and Europe, with BFSI resilient and telecom showing early signs of recovery
Strong signings at $12bn and improving conversion support a better setup into FY27 as management sounds more confident.
AI revenues were up 28% QQ to 7.5% of revenues.
EBIT margins expanded ~10bps QoQ
Crucially, TCS continues to return 80–100% of FCF via dividends and buybacks, offering strong downside support
At 16.5x/15.5x FY27/28E, the stock trades ~2SD below its historical multiple and at a discount to peers despite superior cash returns and margin resilience.
HSBC on TCS
Hold, TP Rs 2755
Reported a decent quarter in context of widespread pessimism around the IT sector
Think stronger exit-rate & improvement in demand outlook positions it well for a relatively better FY27 over FY26
Expect mid to low-single-digit long-term revenue growth
Nomura on TCS
Buy, TP Rs 2930
4QY26 – broadly inline in P&L; three mega deals drive strong deal wins
Management expects FY27F to be better than FY26 for international markets
Reinvestment for growth to continue; expect margin to remain near current levels
Raise FY27-28F EPS by 2-3%
TCS expects usual seasonality of higher growth in 1H vs 2H to follow
Raise USD revenue forecast by 160bp to 3.8% for FY27F & by 20bp to 4.5% for FY28F
Jefferies on TCS
U-P, TP Rs 2275
Mar-26 qtr revenue was in line, though margins missed estimates.
Weak growth in BFSI, flat YoY deal bookings & AI-led revenue deflation due to higher exposure to application managed services should keep growth in check
Margins are expected to remain range bound in absence of strong revenue growth
Rise estimates by 2% due to Fx & expect a subdued 5.5% EPS CAGR over FY26-29.
INCRED on TCS
ADD, TP cut to Rs 3052 from Rs 3663 earlier
4QFY26 revenue growth & EBIT margin were modestly better than estimates.
Demand environment commentary was cautious.
North America (NA) & FSI LTM bookings’ growth was weak/tepid
INR deprecation helps sustain EBIT margin
DAM Cap on TCS
Neutral, TP Rs 2670
FY26 revenue declined 2.4% YoY CC, impacted by macro weakness, high BSNL base, & AI-led deflation.
FY27 should improve on the back of a strong order book, easing macro headwinds, and possible support from BSNL phase 2.
However, AI revenues are likely to take time to offset ongoing AI-led deflation, keeping growth in low single digits over next two years
Model 4.0% growth in FY27 & 5.3% in FY28
Despite a 190bps currency tailwind in FY26 and absence of lower margin BSNL deal, margin expansion was limited to 70bps, highlighting execution and investment drag
With continued AI investments, deal transition costs, and 1QFY27 wage-hike headwind of 150–200bps, margins are likely to remain range-bound
Expect 7% EPS CAGR for FY26-28E. (partially driven by currency).
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