Shares of Tata Consultancy Services (TCS) rose 6 per cent to hit an intraday high of ₹4,297 on Friday following its third quarter results and bullish attitude from brokers.
The company’s net profit rose 5.5 per cent to ₹12,380 crore in the third quarter of fiscal 2024-25. It also announced a dividend of ₹76 per share, including a special dividend of ₹66.
Brokers were bullish on the stock after strong management commentary, modest earnings (slightly below Street estimates) and strong deal wins.
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Also read: TCS shares are up over 4% in early trade on signs of revival in demand
Nuvama Institutional Equities said PAT and EBITA were in line with its estimates. “TCS’s Q3 25 results meet all expectations, despite good expectations,” the report said.
The brokerage noted that management commentary over the past two years has been very positive and led to higher growth in CY25, citing early signs of revival in discretionary spending. It has maintained a buy call on the stock at an increased price target of ₹5,200, compared to ₹5,100 earlier.
Highlighting that this IT giant’s valuations remain attractive against peers like Infosys and HCL, Nuvama’s report reasoned: “We view the strong deal wins and management’s efforts to offset the impact of BSNL’s revenue as positive triggers for TCS. The revival of growth in developed markets and discretionary spending are incrementally positive signals for the sector.”
Domestic brokerage Motilal Oswal sees an upside potential of 24 percent for TCS. The brokerage has reiterated a buy rating on the stock at a target price of ₹5,000. “Looking ahead to FY26, a recovery in customer discretionary spending and a strong US economy could provide a more favorable growth environment,” the report said.
Motilal added that TCS is well positioned for medium-term growth given its size, order book and exposure to long-term orders and portfolio.
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Also read: TCS Q3FY25 Results: There remains a gap between growth and valuation
Global brokerage Nomura has maintained a neutral stance on the stock at a reduced target price of ₹4,020 from ₹4,050. Meanwhile, Jefferies and CLSA have assigned buy ratings at target prices of ₹4,760 and ₹4,546 respectively.
HSBC has allocated a hold at a target price of ₹4,540.
JM Financial upgraded the stock with a buy rating at an increased price target of ₹4,680 from ₹4,230. The broker noted that management highlighted that Gen AI, AI and cloud services continued to see significant growth in the quarter.
Analysts at Emkay Global said TCS’s Q3’25 operating performance was slightly weaker than expected. The brokerage has lowered its estimate by 1-3 percent, taking into account the third-quarter miss and the higher dividend payout. Analysts have maintained an ‘add’ call on the stock at a target price of ₹4,500.”
TCS shares closed among the top gainers among the Nifty 50 voters, up 5.60 per cent on the NSE at ₹4,265. On the BSE, it ended 5.67 per cent positive at ₹4,265.55.
The Nifty IT index rose 3.44 percent to 44,609.50 despite market pressure. Other top stocks from the Nifty 50 include Tech Mahindra, HCL Technologies, Infosys and Wipro.
