TCS Q3 results: Valuations turn inexpensive; fresh target prices
Nuvama said TCS’s investments in Gen AI, including acquisitions, are helping the company build future capabilities, even as Gen AI revenues continue to accelerate.
- Jan 13, 2026,
- Updated Jan 13, 2026 8:24 AM IST
Tata Consultancy Services Ltd shares have declined 24 per cent over the past one year and are trading at what analysts described as attractive valuations after the IT major reported a decent performance in a seasonally soft December quarter. Analysts said the Tata group major delivered a revenue growth and margin beat, though deal bookings came in slightly below expectations.
Motilal Oswal Financial Services said TCS is expected to see dollar revenue and earnings per share compound at 3.6 per cent and 7.6 per cent, respectively, over FY25 to FY28, supported by steady growth from select demand pockets and reasonable deal visibility, despite continued volatility in deal closures.
“Margins have remained stable as wage headwinds and one offs subside, with further upside dependent on execution rather than pricing. We keep our estimates largely unchanged and reiterate Buy with a target of Rs 4,400, based on 26 times FY28E EPS, implying 36 per cent upside,” MOFSL said.
Antique Stock Broking said TCS reported revenue of $7.5 billion, up 0.8 per cent sequentially in constant currency terms, in line with its expectations. It said Europe remained resilient, while North America continued to lag, adding that deal bookings at $9.3 billion were slightly below estimates.
“We marginally decrease our FY27 and FY28 EPS estimates as we lower our other income assumptions, leading to a small cut in our target to Rs 3,450 from Rs 3,475 earlier, while we maintain a Buy rating on the stock due to its inexpensive valuation,” Antique said.
Nirmal Bang Institutional Equities said TCS can deliver sustainable earnings growth, best in class margins, strong return on invested capital and healthy cash flows among Tier 1 IT companies. It added that the stock offers a high margin of safety during periods of elevated volatility.
“Valuations have become lucrative at below the 10 year mean of 24 times. We reiterate our Buy rating on TCS and value it at an unchanged multiple of 23.8 times on December 2027E EPS for a target price of Rs 3,905 versus Rs 3,861 earlier,” Nirmal Bang said.
Nuvama said TCS’s investments in Gen AI, including acquisitions, are helping the company build future capabilities, even as Gen AI revenues continue to accelerate.
“All along, it has shown impeccable control on margins. We tweak our FY26E and FY27E EPS and roll forward our valuation to 23 times FY28. We retain Buy with a target of Rs 3,750 from Rs 3,650 earlier on attractive valuations,” Nuvama said.
Tata Consultancy Services Ltd shares have declined 24 per cent over the past one year and are trading at what analysts described as attractive valuations after the IT major reported a decent performance in a seasonally soft December quarter. Analysts said the Tata group major delivered a revenue growth and margin beat, though deal bookings came in slightly below expectations.
Motilal Oswal Financial Services said TCS is expected to see dollar revenue and earnings per share compound at 3.6 per cent and 7.6 per cent, respectively, over FY25 to FY28, supported by steady growth from select demand pockets and reasonable deal visibility, despite continued volatility in deal closures.
“Margins have remained stable as wage headwinds and one offs subside, with further upside dependent on execution rather than pricing. We keep our estimates largely unchanged and reiterate Buy with a target of Rs 4,400, based on 26 times FY28E EPS, implying 36 per cent upside,” MOFSL said.
Antique Stock Broking said TCS reported revenue of $7.5 billion, up 0.8 per cent sequentially in constant currency terms, in line with its expectations. It said Europe remained resilient, while North America continued to lag, adding that deal bookings at $9.3 billion were slightly below estimates.
“We marginally decrease our FY27 and FY28 EPS estimates as we lower our other income assumptions, leading to a small cut in our target to Rs 3,450 from Rs 3,475 earlier, while we maintain a Buy rating on the stock due to its inexpensive valuation,” Antique said.
Nirmal Bang Institutional Equities said TCS can deliver sustainable earnings growth, best in class margins, strong return on invested capital and healthy cash flows among Tier 1 IT companies. It added that the stock offers a high margin of safety during periods of elevated volatility.
“Valuations have become lucrative at below the 10 year mean of 24 times. We reiterate our Buy rating on TCS and value it at an unchanged multiple of 23.8 times on December 2027E EPS for a target price of Rs 3,905 versus Rs 3,861 earlier,” Nirmal Bang said.
Nuvama said TCS’s investments in Gen AI, including acquisitions, are helping the company build future capabilities, even as Gen AI revenues continue to accelerate.
“All along, it has shown impeccable control on margins. We tweak our FY26E and FY27E EPS and roll forward our valuation to 23 times FY28. We retain Buy with a target of Rs 3,750 from Rs 3,650 earlier on attractive valuations,” Nuvama said.