ICICI Securities has issued a Reduce rating on Tata Consultancy Services with a target price of ₹1,860 in its research report dated July 10, 2026, marking a significant shift from the bullish consensus. The brokerage values TCS at 12x on FY28E EPS to arrive at the target price, citing concerns about near-term revenue growth prospects. TCS management is optimistic about demand recovery in Q2 on the back of pent-up demand and multiple net-new wins, but ICICI Securities believes that moderation in deal TCV in Q1FY27 with a marginal shift toward net-new business, upfront AI-led productivity pass-through and challenging macro make us believe that revenue growth could remain muted in the near term. The brokerage will monitor sustained uptick in hiring, acceleration in incremental AI revenue added and improvement in TCV-to-revenue conversion to gauge top-line revival.
IT stocks including Infosys, Wipro, HCL Tech, Tech Mahindra, and others rallied up to 4% on Friday, buoyed by TCS's better-than-expected Q1 performance. As per The Economic Times, Infosys climbed 4% to ₹1,091, while HCL Tech and Tech Mahindra gained around 4% each to ₹1,192 and ₹1,478 respectively. TCS advanced 3.5% to its day's high of ₹2,118, while Wipro added over 2% to ₹177. The rally lifted the Nifty IT index 968 points, or 3.5%, to 28,439.55. Among midcap IT stocks, Coforge, Persistent Systems, Oracle Financial Services and L&T Technology Services rose as much as 3%.
Technical analyst at Mirae Asset Sharekhan believes the short-term trend for TCS appears 'Neutral' but 'Bullish' from the medium-term perspective, as reported by Business Standard. The analyst expects an upside towards ₹2,500 levels, representing a potential 20% rally from current levels. ₹2,100 is identified as the key hurdle in the near-term, with potential targets of ₹2,300-₹2,500 if this level is breached. The stock is currently trading below key moving averages on the daily chart following the sharp 38% fall this calendar year. Motilal Oswal Financial Services (MOFSL) has maintained its Buy rating on TCS with a target price of ₹2,350, indicating an upside of around 15%. Dolat Capital has upgraded TCS to Buy with a target price of ₹2,580, implying an upside of around 26%. Prabhudas Lilladher has now joined the bullish camp with a buy rating and target price of ₹2,500, maintaining their constructive outlook despite recent challenges. However, ICICI Securities' Reduce rating represents a significant contrast to the bullish consensus, with their target price of ₹1,860 suggesting potential downside from current levels.
According to Business Standard, TCS reported better-than-expected Q1 results with net profit growing 4.6% year-on-year to ₹13,349 crore. The company achieved revenue growth of 13.9% to ₹72,275 crore, beating analyst estimates on revenue growth while missing marginally on profit compared to Bloomberg estimates. Annualised AI revenue came in at $2.6 billion, representing a 13.6% quarter-on-quarter growth and accounting for approximately 9% of the firm's total revenue. As per The Economic Times, while describing the first-quarter performance as soft, Emkay expects growth to improve, led by a recovery in the Life Sciences and Manufacturing verticals, alongside continued strength in Technology Services and BFSI. Prabhudas Lilladher reports that Q1 margins were impacted by the annual wage hike (~170bps) along with continued investments in AI capabilities, partnerships, and net headcount additions (9k+QoQ). Nomura reports that TCS reported a 'broadly in line' June quarter performance with revenue at $7,624 million, up 0.4% QoQ and 3.2% YoY in constant currency terms, marginally ahead of estimates. EBIT margin came in at 24%, down 130 basis points QoQ and 50 basis points YoY, compared with Nomura's expectation of 24.3%.
Nomura has retained its 'Buy' rating on TCS while raising its target price to ₹2,590 from ₹2,570, as reported by Moneycontrol. The brokerage noted that TCS reported a 'broadly in line' June quarter performance with revenue at $7,624 million, up 0.4% QoQ and 3.2% YoY in constant currency terms, marginally ahead of estimates. International business grew 1.2% QoQ in cc terms, while growth among verticals was led by BFSI (+1.6% QoQ) and Technology and Services (+1.7% QoQ). The total contract value (TCV) of deal wins was $9.4 billion (flat YoY) and included a mega deal of $800 million value (net new). Nomura expects AI projects have started moving from proof of concepts to large projects, with AI now forming around 8.5% of TCS's revenues and up 13.6% QoQ. The brokerage expects EBIT margins of 25.0-25.2% in FY27-28F and noted that TCS is trading at 12.6x FY28F EPS of around ₹162. Nomura said 'macro uncertainty weighing on growth outlook in the near term,' but added that TCS expects demand to improve in the second quarter, particularly in Manufacturing and Life Sciences, while remaining optimistic on BFSI and Technology Services.
Prabhudas Lilladher notes that international business (excluding India) declined 0.2% QoQ after growing 1.6% QoQ in Q4FY26, reflecting geo-political conflicts and continued macro uncertainty. While near-term demand remained soft across selected verticals such as Consumer and Manufacturing, the management sounded constructive and anticipates recovery in verticals except Consumer (non-essentials) from Q2FY27. Deal TCV was modest at USD9.5 billion, down 20.8% QoQ and up 1.1% YoY, with the book-to-bill ratio standing at 1.2x. Despite revenue from AI growing at double-digit QoQ, Prabhudas Lilladher believes leakages in the traditional bucket are weighing on topline growth. The brokerage has revised margins downward by 40bps each for FY27E/FY28E, resulting in an EPS cut of 0.8% and 1.6% respectively, while maintaining their valuation at 15x FY28E EPS to arrive at the target price of ₹2,500. Motilal Oswal expects revenue/EBIT/adj. PAT to grow 10%/8.4%/9.3% YoY in 2QFY27, with cash flow from operations at 93% of net profit for 1QFY27.
