TCS shares have garnered varied reactions from leading brokerages following the company’s Q3FY25 performance. While some are optimistic about its growth trajectory, others remain cautious due to near-term headwinds. Here’s what the brokerages have to say:
Brokerage Ratings and Target Prices for TCS share:
| Brokerage | Rating | Target Price (₹) | Key Takeaways |
|---|---|---|---|
| Nomura | Neutral | 4,020 | Modest revenue miss, discretionary demand recovery signs, uncertain BSNL revenue backfill for FY26. |
| CLSA | Outperform | 4,546 | Attractive valuation, improving demand commentary, strong order book, AI as growth driver. |
| Jefferies | Buy | 4,760 | Positive discretionary spend signals, BFSI recovery in North America, ramp-down of BSNL deal aiding margins. |
| HSBC | Hold | 4,540 | Cautious on FY26 estimates, positive deal wins, early discretionary spend recovery. |
| Nuvama | Buy | 5,200 | Positive BFSI and retail recovery outlook, optimistic margin target of 26-28%. |
Nomura on TCS share
Nomura has maintained a Neutral rating on TCS, with a target price of ₹4,020 (revised from ₹4,050). The brokerage highlighted a modest revenue miss versus consensus expectations. However, it noted signs of improving discretionary demand recovery in CY25 and a better decision-making cycle. That said, uncertainty around the backfill of BSNL revenues in FY26 and the outlook for margins poses challenges. Nomura expects margin improvement in FY26.
CLSA on TCS share
CLSA upgraded its rating on TCS to Outperform and raised its target price to ₹4,546. The brokerage sees multiple growth vectors for the IT giant and considers its valuation attractive on a relative basis compared to its 5-year average. While the Q3FY25 performance was lackluster, CLSA observed material improvement in demand commentary and a sharp pick-up in the order book. AI was also highlighted as a key growth driver moving forward.
Jefferies on TCS share
Jefferies has reiterated its Buy rating on TCS, setting a target price of ₹4,760. The brokerage is encouraged by management’s comments on early signs of discretionary demand recovery, particularly in the BFSI sector in North America. It also believes the ramp-down of the BSNL deal could open avenues for margin improvement. Jefferies estimates a 9% EPS CAGR for FY25-27 and finds the current valuation of 27x PE attractive.
HSBC on TCS share
HSBC has maintained its Hold rating with a target price of ₹4,540. The brokerage acknowledged that Q3FY25 was unremarkable, though it noted TCS’s optimism for CY25 due to significant deal wins and signs of discretionary spend recovery. However, HSBC remains cautious, pointing to downside risks to FY26 estimates due to the weakening demand in Europe and the conclusion of the BSNL deal, which supported growth in FY25.
Nuvama on TCS share
Nuvama retained its Buy rating on TCS, raising the target price to ₹5,200 from ₹5,100. It highlighted revenue in line with expectations and decent margin expansion. The management’s positive outlook on BFSI and retail recovery over the next few quarters was seen as a key takeaway. Nuvama noted that TCS maintains a medium-term margin target of 26-28%, with the most optimistic commentary seen in the past two years.
Brokerages are split on their outlook for TCS shares. While Jefferies and Nuvama remain bullish, expecting a recovery in discretionary demand and margin expansion, Nomura and HSBC are more cautious, citing near-term challenges and hazy growth visibility. CLSA, on the other hand, sees valuation attractiveness and strong growth potential, upgrading TCS to Outperform.
Investors may need to weigh these perspectives carefully as TCS navigates through recovery signals and market uncertainties.
