Buy Tata Consultancy Services; target of Rs 3650: Sharekhan

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26 Aug, 2025 12:21

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Sharekhan's research report on Tata Consultancy Services

TCS reported a steady constant currency revenue growth of 3.5%/15.5% q-o-q/y-o-y with strong client metrics and healthy deal wins. EBIT margins missed our estimates owing to supply-side challenges. Demand for operation transformation is robust, led by higher spends on next-gen technologies, multi-service integrated deals and new revenue streams. TCS is at forefront at driving clients’ operation transformation program given its strong capabilities, robust contextual understanding of clients’ operations and domain expertise. Management remains optimistic on achieving 25% EBIT margin by Q4FY2023 as it does not see any incremental supply-side pressure. Margin is expected to improve sequentially in the coming quarters of FY2023E given absence of wage revision, better pricing and currency tailwinds.

Outlook

We maintain a Buy on the stock with a revised PT of Rs. 3,650 given preferred strategic partner for vendor consolidation excercise, healthy deal wins and scope of margin improvement.

More Info

At 17:30 Tata Consultancy Services was quoting at Rs 3,264.85, down Rs 22.10, or 0.67 percent.

It has touched an intraday high of Rs 3,300.25 and an intraday low of Rs 3,250.05.

It was trading with volumes of 76,501 shares, compared to its thirty day average of 106,624 shares, a decrease of -28.25 percent.

In the previous trading session, the share closed up 0.82 percent or Rs 26.65 at Rs 3,286.95.

The share touched its 52-week high Rs 4,045.50 and 52-week low Rs 3,023.35 on 18 January, 2022 and 17 June, 2022, respectively.

Currently, it is trading 19.3 percent below its 52-week high and 7.99 percent above its 52-week low.

Market capitalisation stands at Rs 1,194,625.39 crore.

For all recommendations report, click here

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Tata Consultancy Services - 090722 - khan