TCS earnings lift shares 3% as brokerages split on value
TCS posted a 14% revenue surge and $9.5 billion in new contracts, but a deep split between bullish domestic and bearish international brokerages leaves the stock's severe downtrend unresolved.
Shares of TCS climbed 3% to Rs 2,129 on Monday, extending a two-day rally following the release of its first-quarter results. The bump adds to a 3% weekly gain, but does little to reverse a staggering 34% slump so far in 2026. The stock has now lost 35% over the past year and roughly a third of its value across three- and five-year horizons.
The underlying quarterly performance offered few obvious triggers for such a prolonged selloff. Consolidated revenue grew 14% year-on-year to Rs 72,275 crore, while net profit rose 5% to Rs 13,349 crore. The IT major also secured $9.5 billion in total contract value during the quarter and declared an interim dividend of Rs 12 per share, payable on July 31.
Despite these metrics, the market remains deeply fractured over the company's trajectory. International banks are zeroing in on structural headwinds. Citi downgraded the stock to a 'Sell' rating and slashed its target price to Rs 1,825 from Rs 1,965, pointing to weak growth prospects and subdued international revenue momentum.
Other foreign analysts struck a more neutral tone. Morgan Stanley maintained its 'Equal weight' rating with a target of Rs 2,200. The brokerage noted that the first-quarter results landed in line to slightly ahead of expectations and highlighted that management's guidance for the second quarter was "modestly positive."
Conversely, domestic brokerages view the steep share price decline as a clear buying opportunity. Nuvama, Motilal Oswal Financial Services and Dolat Capital all carry 'Buy' ratings on the stock, with price targets implying up to 45% upside from the previous closing price of Rs 2,069. Emkay also issued an 'Add' recommendation.
With a market capitalisation of nearly Rs 7.7 lakh crore, TCS remains a behemoth, but its valuation is now a battleground. The double-digit revenue growth suggests operational stability, yet until international revenue momentum accelerates, the fundamental gap between bulls and bears is unlikely to close.
