During the quarter, TCS secured three large deals, taking the total contract value to $12 billion for the period. On a QoQ basis, revenue grew 5.4%, while constant currency growth came in at 1.2%, broadly in line with expectations. Operating margin for the January-March quarter stood at 25.3%, up 10 basis points sequentially.
While acknowledging ongoing macroeconomic challenges, the company said client confidence in technology spending remains intact.
From a segment perspective, growth was led by the Europe and UK region, which expanded 6.1% sequentially. The Communication, Banking and Growth segment recorded a 2.8% increase in constant currency terms, pointing to steady demand across key verticals.
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Geographically, the UK posted the strongest performance with a 2.4% sequential rise, while growth in North America was more subdued at 1.4% in constant currency terms.
Management commentary largely focused on navigating uncertainty and strengthening capabilities in artificial intelligence. Aarthi Subramanian, COO of TCS, said FY26 was a significant year for the company’s AI journey. She added that in the fourth quarter, annualised AI revenue crossed $2.3 billion, supported by faster deployment of AI-led solutions.What are analysts saying?
Jefferies has maintained an Underperform rating on TCS, saying there is “nothing to cheer”. The brokerage has set a target price of Rs 2,275 (12% downside) and noted limited signs of a meaningful pickup in demand.
While it has raised FY27 and FY28 EPS estimates by 2% to factor in rupee depreciation, it still expects a modest 5.5% recurring EPS CAGR over FY26-FY28E, the lowest among the top three Indian IT firms. Jefferies also highlighted that TCS trades at a 26% premium to Accenture versus its 10-year average of 0%, which, along with weak growth visibility, could weigh on performance.
Nomura has reiterated its Buy rating and raised the target price to Rs 2,930 from Rs 2,840, implying a 13% upside. The brokerage expects TCS to reinvest gains from currency movements and cost efficiencies into AI capabilities and ecosystem partnerships. It has raised FY27–FY28 EBIT margin estimates by 20 basis points to 25.2% and increased EPS estimates by 2–3% on improved growth and margin outlook.
Also Read: TCS Q4 net profit jumps 12% to Rs 13,718 crore on strong deal wins, weak rupee
Nuvama Wealth Management has maintained a Buy rating and raised the target price to Rs 3,350 (29% upside), citing attractive valuations after the recent correction. While FY26 was weak on growth, margins remained strong and deal wins were stable. The brokerage expects growth recovery in the coming quarters, supported by improving macro conditions and rising generative AI opportunities.
Emkay Global Financial Services has retained its Add rating and raised the target price to Rs 2,950 from Rs 2,800. It expects TCS to evolve into a full-stack AI player and create new revenue streams, including AI infrastructure build-outs.
Emkay has marginally upgraded FY26-FY28 earnings estimates and now values the stock at 18x March 2028 estimated earnings.
Centrum continues to rate TCS a Buy, stating the recent correction appears excessive relative to improving fundamentals. The brokerage highlighted a strong order book, growing AI-led opportunities, steady margins and improving client confidence as key drivers. With macro headwinds likely to ease and recovery expected by FY27, Centrum sees favourable risk-reward, with a target price of Rs 3,841.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)