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Tata Consultancy Services Ltd shares closed 3.47% lower at ₹3,264.50 on the NSE on Friday, after hitting an intraday low of ₹3,261.10 (down 3.57%). The stock remained under pressure through the session following its Q1 earnings miss.

At 3:23 pm, IT stocks continued to trade weak following TCS’s disappointing Q1 results. Wipro Ltd shares were down 2.58% at ₹258.20, while Infosys Ltd traded 1.28% lower at ₹1,595.10.

The Nifty IT Index was also in the red, trading nearly 2% lower, reflecting broad-based selling across the tech pack amid cautious investor sentiment on near-term earnings recovery and demand visibility.

Axis Securities has resumed coverage on TCS with a HOLD rating and a target price of ₹3,625 per share, citing gradual recovery expected from the second half of FY26. “With a strong deal pipeline across business verticals, new partnerships, and higher adoption for new-age technologies, we believe TCS will gradually begin recovery from H2FY26,” the brokerage said.

It noted that TCS continues to see strong enterprise focus on scaling AI across workflows and platforms, and expects international markets to perform better in FY26 versus FY25. Valuations currently stand at 24x FY27E P/E, it added, while maintaining a cautiously optimistic sector outlook.

JM Financial maintained a ‘Buy’ rating on TCS with a revised target price of ₹3,950, citing confidence in the company’s deal momentum despite near-term growth headwinds. “The panacea for all these – growth, wallet share gains – remains TCV, which TCS continues to win. Also, it is improbable that TCS is winning new deals but is unable to retain its current book of business.”

The brokerage added that once macro uncertainty lifts, growth should recover. “That, along with undemanding valuation (22x FY27E), underpin our constructive view,” JM said.

Kumar Rakesh, India Analyst – Auto & IT at BNP Paribas, said the weak Q1 print could weigh on TCS’s valuation premium relative to peers. “Given the weak first quarter, possibly the full year outlook also is quite muted compared to some of the other peers. And hence that premium valuation, which used to be there, may take some time to come back. That’s why, relative to TCS, some of the other names may start looking more attractive,” he said.

At 2:25 pm, shares of Tata Consultancy Services Ltd were trading 3.34% lower at ₹3,269 on the NSE, recovering slightly from the day’s low of ₹3,266 after a weak Q1 print. The stock has come under pressure following a sequential decline in revenue and subdued commentary on discretionary tech spending.

Brokerage firms Nomura and UBS have trimmed their price targets on shares of Tata Consultancy Services (TCS) Ltd. after the Tata Group giant reported soft June quarter numbers.

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“Dividend yield gives you a perspective in terms of whether there is any further downside risk going on. The TCS is trading at about 3.7% one-year forward dividend yield. Today’s correction would have moved that at a little higher. And that essentially tells you that, okay, from here on, possibly the downside risks are not there. But the point that you are talking about of the demand environment and the catalyst that still needs to be there for the outperformance or the stock to start moving up, which is the point which I was referring to. Given the weak first quarter, possibly the full year outlook is also quite muted compared to some of the other peers. And hence that premium valuation, which used to be there, may take some time to come back, and that’s why, relative to TCS, some of the other names may start looking more attractive,” says Kumar Rakesh, India Analyst-Auto & IT, BNP Paribas.

Shares of TCS have extended their losses in today’s session, currently trading 3.3% lower to hit an intraday low of ₹3,270.

The stock is now just 6% away from its 52-week low of ₹3,056.

– Retain neutral, Target Cut To ₹3,780 From ₹3,820

– Growth Visibility For FY26 Is Still Hazy

– Constant Currency Lower Than The Consensus Estimate

– Co Continues To Expect FY26 To Be Better Than FY25 For Major Markets

= Significant Margin Improvement In FY26 Is Unlikely

– Cut FY26-28 EPS Estimates By 1-2%

– Will calibrate hiring based on the situation

– Primary demand is cost take out and vendor consolidation deals

– Discretionary demand is under pressure

– Margins impacted as we invested in capacity anticipating growth but towards the end there was some demand contraction

– Margins boosted by BSNL rampdown and currency benefit

– BSNL deal is not included in the TCV this qtr since it’s a purchase order

– No made any decision on the wage hike front

– Guiding beacon of 26-28% on margins stays

Most analysts who have coverage on TCS have a “buy” rating on the stock.

34 out of the 50 stocks who have coverage have a “buy” rating.

12 analysts have a “hold” rating, while four others have a “sell” recommendation.

– AI Is Not Deflationary In Terms Of Pricing

– Our Business Philosophy Has Always Been That Of Profitable Growth

– We Need To Drive Growth While Retaining Margin

– We Added More Headcount At The Beginning Of The Quarter, Expect Further Growth

– Confident That International Market Rev Growth Will Be Better In FY26 Vs FY25

Shares of TCS are down to the lows of the day, Currently trading 2.2% lower at ₹3,309.

The stock had made an intraday low of ₹3,297.

– Maintain Buy, Target Cut To ₹3,950 From `₹4,050

– Stock Price Has Underperformed Its Large Indian Peers Over Last Five Years

– Stock Underperformance On De-rating As Revenue Conversion Is Slow

– Believe Market Will Look At TCS Growth Ex-BSNL

– It Can Still Deliver Industry Average Growth In FY26

– Q1 Revenue Miss Largely Due To BSNL Deal Ramp-down

– Current Valuations Give Comfort & See Limited Downside

– TCS May Perform Better Than HCLTech In The Next 12-18 Months

– Think TCS Has A Lot Of Buffer Capacity Which They Haven’t Used

– Maintain buy rating

– Price target of ₹3,850, implies potential upside of 14%

– No growth kicker yet, but margin scope remains intact

– Model revenue of new BSNL order to reflect only in Q3

– Growth continues to remain elusive

– Expect 3% US Dollar revenue CAGR over FY25-27

– Valuation are undemanding

Other IT stocks have also declined in response to the TCS results which were reported after market hours on Thursday.

Infosys shares are down up to 2.5% in earl trading, while those of Wipro, LTIMindtree, HCLTech are down between 1.5% to 2%.

Shares of TCS have opened 2% lower in early trading on Friday, in response to the first quarter earnings miss.

The stock has taken the other IT stocks lower along with it, with the Nifty IT index declining over 2%.

– International market revenue growth (-0.5%) missed our own estimates by 100 bps

– Some clients ‘de-prioritized’ or postponed their programmes

– Was expecting the global uncertainty to be short-lived, but its continuing

– AI growth in Q1 has come from industry specific solution, modernize technology estate and projects at scale

– Didn’t see many deal cancellations but saw delays in Q1

– “too early to call” if Q2 will be impacted by macro uncertainty

– Revenue drop included 2.8% impact due to ramp down of BSNL contract and 0.5% drop in international market

– Maintains buy rating

– Price target cut to ₹3,950 from ₹4,050

– Given the lack of clarity around trade deals, clients continue to remain cautious

– Wage hikes continue to be delayed at a later time

– Current valuations give comfort and we see limited downside

The TCS earnings as such is a no event. However, there are two silver linings – one they have added headcount which is up by 5,000 on a quarter on quarter basis with an increased attrition. So, that is a positive sign, it means that they are optimistic about the demand environment. But also remember 5,000 is on a base of 6,38,000. So, it is nothing very big. At the same time the miss in the revenue is quite sharp. So, I would say this is a little poor number, although TCV is in line with expectation, and some head count is the only silver lining. Margin, I am not very excited, because it is only 30 bps increase, and that too, when you are not giving wage hike. Also, there is also no impact of BSNL this quarter. So, I would read these results as no event to slightly negative.

– Retain Neutral rating

– Price target of ₹3,650

– Begins FY26 on a weak note

– Negative operating leverage from unexpected demand shock drove ex-forex margins down by 10 bps, despite currency tailwind and falling hardware costs.

– Expect FY26 revenue to decline for overall business and stay fat in the international market on a constant currency basis

– Maintain “Hold” rating

– Price target at ₹3,665

– Q1 was a miss on topline led mainly by BSNL, but also with a miss on the international business

– Of more concern and unusually, TCS seems to be struggling on profitability as well

– Demand commentary slightly weaker than expected

– Not made any decisions on wage hike for FY26E yet.

– Services like AI, Data and interactive, movement to cloud, app modernization have grown well this quarter.

– Strong demand for data and AI. Customers are looking to advance from pilots to scaled GenAI deployments.

– There’s a lot of pent-up demand and once there is clarity on macros, discretionary spending will come back.

– Retail neutral rating as growth visibility for FY26 remains hazy

– Management though, continues to maintain that FY26 will be better than FY25 for major markets

– Significant margin improvement in FY26 is unlikely

– Cut FY26-28 EPS estimates by 1% to 2% to factor in revenue and margin changes

– Cut price target to ₹3,780 from ₹3,820

– Trend of delay in decision making by clients and deferment of deals continued in Q1 owing to the uncertain environment.

– Clients continue to focus on ROI of new investments, which has led to delays and pause in deals.

– Few deals which were about to start in Q1 have seen delays.

– With all trade discussions coming to a close and new Bill gaining Presidential sanction, things will become clearer by end of July.

Deal wins remained within the company’s guided band, but narrowed in comparison to the March quarter. US Dollar revenue declined compared to expectations of growth, while net profit was aided by a higher other income component.

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