TCS slumps 4% post Q4 nos: Why are analysts still bullish?

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26 Aug, 2025 12:21

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Shares of Tata Consultancy Services (TCS) slipped 4.3 percent intraday on Friday after its March quarter earnings disappointed investors. However, most brokerages are still bullish on the IT major but tweaked target price slightly.

Credit Suisse has an outperform rating and a unchanhed target of Rs 3100. "While this quarter will be counted as a disappointing one, the stock has underperformed and underlying fundamentals seem solid. However, solid growth in 1Q FY16 will be required as a positive strong catalyst for the stock. We have slightly lowered our EPS estimates to account for currency headwinds," it says in a report.

Macquarie also reiterates outperform rating with a 12-month price target of Rs 3240.  According to it, expectations for TCS have moderated in the last six months and is confident that the company will continue to lead the pack with growth.

Deutsche Bank retains buy rating with a target price of Rs 2900 stating that despite severe cross currency headwinds the company reported better than expected operating margins due to higher realisation, and operational efficiency. It argues that below par revenue growth in BFSI, telecom and energy and utilities vertical were the key reasons for the muted revenue growth.

Jefferies maintains a hold rating with a revised target price of Rs 2450. "Risks of growth slowdown, increasing competitive intensity, lack of incremental margin levers and currency headwinds are for the entire sector, with TCS equally exposed despite its sector leadership. We expect a modest correction on the back of these soft results," it says in a report.

Jefferies also warns that risks poised for TCS include improvement in deal flow and volume growth on the upside and on the downside are weakening macro and adverse currency moves.

JP Morgan is neutral on it advising to enter on declines as it feels a positive surprise to be able to deliver double-digit stock returns over CY15 seems difficult unless the rupee weakens.

"TCS continues to stay confident of the demand environment shaping up as it enters into FY16. So, unless things get better from here, it is hard to see how TCS can reasonably outperform FY15 on growth in FY16 on organic constant currency (CC) growth," it explains.

The software services exporter's fourth-quarter revenues fell 1.1 percent to Rs 24,220 crore while net profit (adjusted for one-time employee bonus) rose 8.4 percent to Rs 5,906 crore. In constant currency terms, revenues were up 1.6 percent. In dollar terms, revenues were down 0.8 percent sequentially

At 09:30 hrs TCS was at Rs 2521, down Rs 64.20, or 2.48 percent on the BSE.

Posted by Nasrin Sultana