TCS target price for 2026: India’s tech major, Tata Consultancy Services (TCS), reported steady performance for the third quarter of fiscal year 2026. The company secured healthy deal wins totaling $9.3 billion, but the profit was impacted by one-off restructuring costs and the implementation of the new labour code.
However, the company’s massive scale-up in Artificial Intelligence (AI) projects has taken center stage as ttop brokerages released their latest target prices and ratings..
#1. Motilal Oswal on TCS: ‘Buy’
Motilal Oswal maintains a ‘Buy’ rating on TCS with a target price of Rs 4,400, suggesting a 36% upside potential from the current levels. The brokerage described the third quarter as a “safe quarter” where the company’s revenue of $7.5 billion slightly beat their estimates, growing 0.8% in constant currency terms.
While they noted that “demand signals remain choppy,” a full recovery in discretionary spending is not yet visible. According to them, the deal momentum remains reasonable with a total contract value (TCV) of $9.3 billion. The firm highlighted that the adjusted profit after tax (PAT) grew 6.4% sequentially to Rs 141 billion, surpassing their expectations when excluding one-off restructuring and labor law expenses.
Motilal Oswal pointed out that “reasonable deal momentum supports visibility” and anticipated a stronger performance in the fourth quarter as seasonal factors like furloughs end.
#2. JM Financial on TCS: Buy
JM Financial has issued a ‘Buy’ rating for TCS, raising its target price to Rs 3,810 (up from Rs 3,770) This implies a potential upside potential of 17%. The firm termed the quarter as an “early optimism” phase, noting that the 0.8% constant currency revenue growth exceeded their projections.
JM Financial observed that the “management noted an improving demand environment, with a pick-up in short-cycle deals (ROI-led AI rapid builds) and accelerating growth in AI-led services”.
Although deal wins saw a 9% year-on-year decline to $9.3 billion, the brokerage pointed out that the trailing twelve-month book-to-bill ratio remains healthy at 1.4x. They also highlighted a 2% headcount reduction this quarter as a sign of “further cost rationalization,” which helped keep operating margins stable at 25.2%.
#3. Elara Securities on TCS: ‘Accumulate’
Elara Securities has reiterated its ‘Accumulate’ rating for TCS, keeping the target price at Rs 3,600, representing an upside of 11%. Their analysis indicates that third-quarter revenue was “a tad better than our expectations,” primarily due to improvements in the international business segment.
Elara Securities pointed out that “AI momentum remains strong,” with annualized AI services revenue reaching $1.8 billion, which now accounts for approximately 6% of total revenues.
The brokerage observed that while the India market was a “drag on growth,” the recovery in global markets will likely be led by “AI-led short-cycle projects and broad-based AI adoption”. However, they cautioned that an “uptick in attrition may keep cost elevated and margin strained in the near term”.
#4. Emkay Global on TCS: ‘Add’
Emkay Global maintains an ‘Add’ rating on TCS with a target price of Rs 3,500, suggesting an upside of 8.0%. The firm characterised the quarter as “in-line,” noting that the operating margin remained stable at 25.2% despite headwinds from wage hikes and brand investments. Emkay Global expressed optimism for the future, stating they expect “CY26 to be better than CY25” as the demand environment continues to improve.
They were particularly optimistic due to the steady rise in “RoI-driven, short-cycle AI projects across industries,” with AI services revenue reaching approximately $450 million for the quarter.
The brokerage likes the “healthy deal intake” and “steady cash conversion,” though they noted softness in the banking, financial services, and insurance (BFSI) sector and the UK market as areas of concern.
Conclusion
The consensus among these top brokerages suggests a steady outlook for TCS, characterized by a transition toward AI-driven revenue and a gradual recovery in international markets. Motilal Oswal, JM Financial, Elara Securities, and Emkay Global provide a more measured outlook, focusing on cost rationalization and stable margins. All four firms are optimistic about an accelerated performance as the AI initiatives continue to scale up.
Disclaimer: This article provides factual analysis only and is not, and should not be construed as, an offer, solicitation, or recommendation to buy or sell securities. Investors must conduct their own independent due diligence and seek advice from a SEBI-registered financial advisor.