Tata Consultancy Services (TCS) shares edged up 0.5% to ₹3,503.40 in today’s session after Kotak Institutional Equities upgraded its rating on the stock from ‘ADD’ to ‘BUY.’ Despite the upgrade, the brokerage has lowered its target price to ₹4,100 from ₹4,550, citing a reduced target price-to-earnings (PE) multiple of 25x, down from 27x.
TCS stock has seen a sharp correction of 17% over the past three months and 22% over the last six months. The valuation multiple has now reverted to pre-COVID levels, making the stock more attractive at 23x the 12-month forward earnings multiple. Kotak highlighted that FY2026E is expected to be another year of below-normalized growth due to the fragile recovery in the IT sector and potential deflationary risks associated with Generative AI (GenAI).
TCS currently has a market capitalization of ₹12.68 trillion and a P/E ratio of 26. The stock has traded within a day range of ₹3,476.15 to ₹3,523.25. Over the past year, it has fluctuated between ₹3,457 and ₹4,592.25. The dividend yield stands at 1.66%.
Meanwhile, Tech Mahindra remained flat in today’s session. Kotak also upgraded Tech Mahindra to ‘BUY’ with a target price of ₹1,800, citing an improved turnaround potential at a more reasonable valuation. The brokerage noted that Tech Mahindra currently trades at an attractive valuation of 19x FY2027E earnings, with the company aiming to deliver a 15% EBIT margin in FY2027E compared to 6.1% in FY2024 and 9.6% in FY2025E.
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