Buy TCS shares, says Axis Securities; stock down 21% YTD; check target price
TCS announced plans to build a sovereign AI data centre with up to 1 GW capacity, involving an estimated investment of $6-7 billion over 5-7 years.
- Dec 18, 2025,
- Updated Dec 18, 2025 12:52 PM IST
Shares of Tata Consultancy Services (TCS) were trading in the green on Thursday. At last check, TCS shares were trading 1.38% higher at Rs 3,260.20 in Thursday’s trade on BSE over its previous close of Rs 3,217.60 apiece. The IT major has faced significant headwinds this year, with the stock down nearly 21% in 2025 so far.
Following the company's Analyst Day 2025, Brokerage firm Axis Securities has recommended a ‘Buy’ rating on the stock with a target price of Rs 3,565. This implies a potential upside of over 9% from current levels.
The brokerage expressed optimism regarding the tech giant's strategic pivot, noting that the management views the transition from a digital to an AI enterprise as a huge opportunity for growth.
In their investor presentation, filed with the exchanges, TCS management outlined a shift from a 'Digital Enterprise' focused on automation to an 'AI Enterprise' driven by reasoning and autonomy. The company highlighted its robust financial traction in this domain, reporting that its dedicated AI Services segment is already generating an annualised revenue of $1.5 billion, registering a robust 16.3% QoQ growth.
The presentation detailed TCS's deployment of an infrastructure to intelligence architecture anchored on five transformation pillars: internal transformation, redefining all services, building a future-ready talent model, making AI real for clients, and expanding the AI ecosystem.
TCS announced plans to build a sovereign AI data centre with up to 1 GW capacity, involving an estimated investment of $6-7 billion over 5-7 years, Axis said.
Axis Securities highlighted TCS's disciplined execution and industry-leading profitability. The company aspires to maintain EBITDA margins in the range of 26-28%, driven by operational excellence and outcome-based pricing models.
Axis noted that TCS continues to deliver exceptional shareholder value with a return on equity (RoE) of 51.2% for FY25—significantly higher than its peers—and free cash flow consistently exceeding 100% of net profit.
"We believe TCS's revenue and EBIT to grow at a CAGR of 5% and 9% over FY25-27E on the back of continued deal wins despite a stable macro-environment," Axis Securities said in its note. The brokerage values the company at a 23x P/E multiple on its FY27E earnings.
Shares of Tata Consultancy Services (TCS) were trading in the green on Thursday. At last check, TCS shares were trading 1.38% higher at Rs 3,260.20 in Thursday’s trade on BSE over its previous close of Rs 3,217.60 apiece. The IT major has faced significant headwinds this year, with the stock down nearly 21% in 2025 so far.
Following the company's Analyst Day 2025, Brokerage firm Axis Securities has recommended a ‘Buy’ rating on the stock with a target price of Rs 3,565. This implies a potential upside of over 9% from current levels.
The brokerage expressed optimism regarding the tech giant's strategic pivot, noting that the management views the transition from a digital to an AI enterprise as a huge opportunity for growth.
In their investor presentation, filed with the exchanges, TCS management outlined a shift from a 'Digital Enterprise' focused on automation to an 'AI Enterprise' driven by reasoning and autonomy. The company highlighted its robust financial traction in this domain, reporting that its dedicated AI Services segment is already generating an annualised revenue of $1.5 billion, registering a robust 16.3% QoQ growth.
The presentation detailed TCS's deployment of an infrastructure to intelligence architecture anchored on five transformation pillars: internal transformation, redefining all services, building a future-ready talent model, making AI real for clients, and expanding the AI ecosystem.
TCS announced plans to build a sovereign AI data centre with up to 1 GW capacity, involving an estimated investment of $6-7 billion over 5-7 years, Axis said.
Axis Securities highlighted TCS's disciplined execution and industry-leading profitability. The company aspires to maintain EBITDA margins in the range of 26-28%, driven by operational excellence and outcome-based pricing models.
Axis noted that TCS continues to deliver exceptional shareholder value with a return on equity (RoE) of 51.2% for FY25—significantly higher than its peers—and free cash flow consistently exceeding 100% of net profit.
"We believe TCS's revenue and EBIT to grow at a CAGR of 5% and 9% over FY25-27E on the back of continued deal wins despite a stable macro-environment," Axis Securities said in its note. The brokerage values the company at a 23x P/E multiple on its FY27E earnings.