Brokerages remain divided on Tata Consultancy Services (TCS) after the IT major’s Q2FY26 results, with calls ranging from Sell to Buy. While some analysts turned optimistic on the company’s long-term digital and AI strategy, others flagged near-term challenges in demand recovery and margin expansion.
At the time of reporting, TCS shares traded at ₹3,060.20 per share.
Citi maintained a Sell rating with a target of ₹2,800, saying Q2 performance was in line on revenue, aided by higher equipment and software sales. The brokerage added that TCS’s expectation of over 0.7% YoY growth in its international business for FY26 appears difficult to achieve and noted that asset intensity is set to increase.
Goldman Sachs retained a Buy call with a target of ₹3,300, highlighting in-line constant currency growth and slightly better EBIT expansion. The brokerage cited TCS’s foray into data centres, with plans to build 1 GW capacity over 5–7 years, accounting for around 15–20% of India’s total capacity. It also observed that TCS is stepping up acquisitions, a shift from its usual cautious stance.
CLSA reiterated an Outperform rating and a target of ₹3,559, saying TCS beat estimates across revenue, margin, and order booking. The brokerage expects better demand in H2FY26 and highlighted proactive workforce restructuring to make the company more AI-ready.
HSBC maintained a Hold rating with a target of ₹3,260, stating that Q2 results were a beat on both growth and margin, while deal wins were in line. It termed the company’s AI capacity additions a positive move that strengthens relationships with hyperscalers.
Nomura retained a Neutral rating with a target of ₹3,300, noting a modest Q2 beat and highlighting the data centre expansion as a way to deepen TCS’s presence in the AI ecosystem, though it does not expect major margin improvement this fiscal.
Jefferies has a Hold rating with a target of ₹3,100, flagging that growth in key markets remains weak and a 3% sequential drop in headcount is a concern. The brokerage, however, said TCS’s intent to invest for future growth is encouraging, though its data centre venture may have limited synergy with IT services.
Nuvama Institutional Equities retained a Buy call with a target cut to ₹3,650, saying Q2 revenue grew 0.8% QoQ in constant currency, slightly above estimates. It termed TCS’s AI data centre investment as a strategic pivot but trimmed FY26–27 EPS estimates by 2% each on lower growth assumptions.
Avendus upgraded TCS to Buy with a target of ₹3,700, the highest among brokerages, citing strong deal-win momentum ($9.4 billion in Q1 and $10 billion in Q2) and expected revenue recovery in H2FY26 and FY27. It maintained revenue and margin forecasts while highlighting vendor consolidation and AI data centre expansion as key positives.
CMP: ₹3,060.20
Target Range: ₹2,800–₹3,700
Disclaimer: This article is based on brokerage research reports. It is for informational purposes only and does not constitute investment advice. Investors should consult certified financial experts before making investment decisions.
