Tata Consultancy Services (TCS) share price jumped 1.62% to Rs 3314.05 today after the IT major reported a 16.8% on-year rise in net profit for the quarter ended June 30, 2023, driven by strong growth in total contract value (TCV) deal wins despite a tough business environment. The company’s consolidated revenue for the quarter came in at Rs 59,381 crore, marking an on-year surge of 13%. TCS stock has gained 2.4% in the last one month and over 9% in the past one year.
Should you buy, sell or hold TCS shares?
HDFC Securities: ADD – Target Price: Rs 3710
“Tata Consultancy Services (TCS) delivered a soft (in-line) performance in Q1 but recorded strong deal bookings which provide visibility despite challenging macros. Flat sequential revenue growth was impacted by broad-based weakness across verticals—BFSI, Communication & Media, Technology & Services (46% of revenue declining 1% QoQ)—while the remaining business grew 1.6% QoQ. Our target price of Rs 3,710 is based on 26x Jun-25E EPS with an EPS CAGR of 10% over FY23-26E; we maintain ADD,” said analysts at HDFC Securities.
Kotak: ADD – Fair Value: Rs 3400
“TCS is better positioned than others to gain wallet share and will be at the forefront of the cost take-out agenda of clients, a necessity in a constrained spending environment. Its balanced portfolio between discretionary and run- the-business (RTB) services mirrors global IT spending. We incorporate revised INR/USD assumptions from KIE economists and tweak estimates leading to a 0-1% FY2024-26E EPS cut. FV increases to Rs3,400 on rollover; we value TCS at unchanged 22X June 2025E earnings. Maintain ADD rating,” said analysts at Kotak Institutional Equities.
Nuvama: BUY – Target Price: Rs 4000
“Given revenue deceleration in FY24, impacted by cut in discretionary spending, is already known and priced in, we expect growth to bounce back in FY25, for the entire sector, driven by a sustainable strong demand environment. TCS shall be one of the biggest beneficiaries of this demand, driven by its capabilities in winning transformational as well as cost takeout deals – as manifested in its deal wins in Q1. We retain ‘BUY/SO’,” said analysts at Nuvama Institutional Equities.