TCS share price targets see cuts post Q4 miss; valuations attractive post 30% fall, says analysts

Tata Consultancy Services Ltd (TCS) reported a modest March quarter results, with sequential constant currency (CC) revenue degrowth at 0.8 per cent coming in slightly below Street’s estimate of 0.2 per cent. TCS' profit figure also, fell short of analyst estimates but marginally. That said, its deal momentum stayed strong at $12.2 billion, which was higher than $10-11 billion projections. 
Stock analysts have largely maintained their 'Buy' ratings on the stock, but a few trimmed their targets following the Q4 miss. 

Nuvama said the revenue growth for TCS was impacted by the BSNL ramp-down. It noted that the TCS management expects the ongoing US tariff-led uncertainty is temporary, and that the strong deal-wins of last two quarters should help the IT major report higher growth in FY26 from developed markets, than FY25. 

"We make minor adjustments to our FY26E/27E EPS (down 2.4 per cent/down 2.7 per cent). We continue to value TCS at 25 times FY27E PE, with a target of Rs 4,050 (earlier Rs 4,200). Retain ‘BUY’ at attractive valuations (4 per cent dividend yield).

Choice Broking maintained its ‘Buy’ rating on the stock but revised its target price lowered to Rs 3,950, which implies a PE multiple of 24 times based on the FY27E EPS of Rs 164.60. Nomura India cut its target on TCS to Rs 3,490 against Rs 3,890 earlier. It said changes. Growth visibility for FY26 is still hazy, it said while retaining 'Neutral' rating on TCS.

TCS shares have corrected about 30 per cent since their peak over the past year, which has led to valuation becoming more reasonable, said Antique Stock Broking. 

"The stock currently trades at a forward PE of 22 times, which is at a marginal premium to the Nifty IT index vs the peak premium of 30 per cent in April 2020. TCS being one of the best managed companies among Indian IT services companies, we expect its current valuations to offset the near-term earnings volatility due to global uncertainties," Antique said. 

This brokerage has upgraded TCS to 'Buy' from 'Hold' due to its inexpensive valuation and a gradual recovery in growth from 2HFY26 onwards. 

"Following the recent correction, there is a 28 per cent upside from the current market price, with our earnings estimates and target price of Rs 4,150 unchanged," Antique said.