TCS shares down 31% YTD; experts say AI infrastructure push could support long-term growth

Shares of Tata Consultancy Services Ltd (TCS) declined 1.32 per cent on Tuesday to settle at Rs 2,220.50. At this closing price, the IT major has fallen 31.19 per cent in the calendar year 2026 so far.

Even as the stock remains under pressure, a few market experts continue to view the company's long-term prospects positively, citing its growing focus on artificial intelligence (AI) infrastructure and data centres.

Tata Consultancy Services (TCS) has reportedly acquired two land parcels in Visakhapatnam (Vizag) and Pune, which could house US-headquartered OpenAI's first data facilities in India. Business Today has reached out to the company for clarification on the development. A response was awaited at the time of publishing this article.

Ravi Singh, Chief Research Officer at Mastertrust, said, "The reported move to acquire land in Vizag and Pune suggests the company is preparing for the next wave of AI-led growth rather than just expanding its traditional IT business. If these locations are developed into AI data centres, they could strengthen TCS' ability to offer large-scale AI infrastructure and support growing enterprise demand for generative AI solutions. The development also aligns with the company's broader AI strategy and reflects its intent to build long-term capabilities instead of focusing only on short-term opportunities."

He also said, "For investors, the news is encouraging from a strategic perspective, but it is unlikely to change the company's earnings outlook immediately in the short term. The key factors to watch will be official announcements, the pace of project execution and how these investments translate into commercial opportunities. If executed well, this initiative could enhance TCS' AI offerings, create new revenue streams and reinforce its position as a leading technology partner in the evolving AI ecosystem."

Kranthi Bathini, Equity Strategist at WealthMills Securities, stated, "With an increased focus on data centres and AI, TCS is strengthening its presence in the data centre segment through its collaboration with OpenAI. The company is expanding its footprint in this business, which reflects a long-term strategic focus and could support its long-term growth prospects."

On the financial front, TCS reported a consolidated net profit of Rs 13,349 crore for the June quarter (Q1 FY27), up 4.62 per cent year-on-year (YoY) from Rs 12,760 crore in the corresponding period last year.

Revenue from operations increased 13.93 per cent YoY to Rs 72,275 crore from Rs 63,437 crore in the year-ago quarter.

As of June 30, 2026, the IT services giant had a total workforce of 5,93,798 employees. Its last twelve months (LTM) attrition rate in the IT services business stood at 13.6 per cent during the quarter.