11 Jul , 2025 By : Debdeep Gupta
Shares of information and technology giant Tata Consultancy Services (TCS) slipped on Friday, July 11, following the IT services giant's earnings show for the first quarter of FY2026.
TCS said its Q1FY26 net profit rose 6 percent year-on-year to Rs 12,760 crore, from Rs 12,040 crore reported in the same quarter last year. On a sequential basis, profit grew 4.4 percent from Rs 12,224 crore, surpassing Street expectations
India's largest IT company also said its revenue from operations grew 1.3 percent to Rs 63,437 crore for the April-June quarter. The company's Total Contract Value (TCV) for the quarter stood at $9.4 billion, down from $12.2 billion clocked in Q4. This was more than the Street estimates of $8-9 billion.
At 9.17 a.m., shares of the firm were quoting Rs 3,315.8, lower by 2 percent on the NSE.
Should you buy, sell, or hold shares of TCS?
Japan-based brokerage Nomura retained its 'neutral' call, trimming its target price to Rs 3,780. from Rs 3,820 per share, as the growth visibility for FY26 still remains hazy. Further, the brokerage noted that TCS' constant currency was lower than consensus estimates. Going ahead, significant margin improvement in the year is unlikely, noted Nomura.
UBS, too, cut its target on the IT services player's share price to Rs 3,950, down from Rs 4,050, while keeping its 'buy' call intact. According to UBS, the market will look at TCS' growth ex-BSNL, as the Q1 revenue miss was largely due to the ramp-down of the BSNL deal.
UBS noted that TCS' stock price has underperformed its large Indian peers over the past five years, as a result of de-rating, following slower revenue conversion. The current valuations of the stock give the brokerage comfort, and there's limited downside scope.
HSBC reaffirmed its 'hold' call, with a price target of Rs 3,665 per share. The first quarter earnings show was a miss on the topline, largely led by BSNL and also the international business arm. The broking house added that the company seems to be struggling on profitability as well, and the demand commentary is weaker-than-expected.
JPMorgan remained 'neutral', issuing a price target of Rs 3.650 per share. The firm sees TCS' FY26 CC revenue to decline for the overall business, while staying flat for the international business.
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