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CLSA Reiterated its “Outperform” rating on TCS, noting an attractive risk-reward profile with a free cash flow (FCF) yield of ~6%.

– Open 30-day upside view

– TCS has underperformed Nifty IT significantly over the last 12 months

– Stock now trades at 15.5 times its estimated financial year 2027 earnings

– Stock trades at significant discount to peers like Infosys and HCLTech

– Expect a relatively decent Q4

– Expect deal wins to range between $10 billion to $11 billion

– Stock could see some upside in next 30 days

TCS shares are off the highs of the day, in-line with the sell-off seen in the Nifty 50 index.

Maintains an Overweight rating but cut the target PE multiple to 19x (from 25x) due to a slower expected growth recovery.

Over the last six months, TCS has signaled aggression by announcing a 1GW data center plan and conducting its first analyst meet in a decade.

– Vertical-wise demand commentary remains intact with BFSI continuing to see tailwinds for all four companies, tech is doing well for HCLTech & TCS, while retail, auto and healthcare verticals remain soft

– Have an outperform rating on Infosys, TCS, Tech Mahindra & LTIMindtree

– Deal pipelines remain strong and valuations for India’s IT sector at its 10-year average now look highly attractive

– Overweight rating

– Price target of ₹3,540 per share

– View partnerships with global AI cos similar to partnerships formed by these vendors with hyperscalers during cloud / digital cycle

– Continue to believe that data centre business adds long-term optionality for TCS, & investors would eventually gravitate toward valuing co on a sum-of-the-parts basis with greater revenue visibility from this business

– The ramp-up of the second phase of the BSNL contract

– Benefit due to INR depreciation

– Guidance for International business growth for FY27

– Disruptions from ongoing conflict in the Middle East across verticals.

– Progress on AI

– TCS trades at 15.5X financial year 2028 estimated price-to-earnings

– Infosys trades at 16.5X financial year 2028 estimated price-to-earnings

– HCLTech at 17-17.5X financial year 2028 estimated price-to-earnings

A top priority for investors is the timeline for the ramp-up of the second phase of the BSNL contract. Jefferies explicitly notes they do not expect revenue contribution from this deal in the Q4 print.

Shares of TCS have seen a significant recovery from the lows of the day ahead of their results announcement and are now at the highs of the day.

– Margins may expand by 20 basis points from the December quarter

– Margins will see a currency benefit by 60 – 70 basis points along with improved operating leverage

– Higher variable allowances, senior-level promotions, tactical investments will be some headwinds

– EBIT margin seen expanding by 20 basis points from the previous quarter

– Net profit seen 29% higher on a sequential basis at ₹13,727.6 crore

– Profit in the third quarter was impacted by exceptional items of ₹3,391 crore

– US Dollar Revenue growth seen 1.5% quarter-on-quarter to $7,619.5 million

– Constant Currency Revenue Growth seen at 1%

– Brokerages have pegged the CC growth range to be between 0.6% to 1.4%

– Topline to be boosted by inorganic contribution of approximately 30–40 basis points from the Coastal Cloud and ListEngage acquisitions

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TCS will be the first Nifty 50 company that would be reporting its Q4 results today.

Along with TCS, broader market names like Anand Rathi Wealth and GM Breweries will also be reporting their results today.

Good Morning!

Welcome to CNBC-TV18’s Live coverage of the fourth quarter results from Tata Group giant, Tata Consultancy Services (TCS).

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