The TCS shares are up over 4% and hit an intra-day high of Rs 4,225 per share despite disappointing Q3 numbers. This is because brokerage firms are bullish on the stock. CLSA upgraded the IT major’s rating to Buy after it released its Q3 FY25. Meanwhile, Nuvama Wealth Management raised the target price to Rs 5,200 per equity share. Jefferies has maintained a ‘Buy’ rating on TCS.

Here is a look at why brokerages are bullish: 

1. TCS Q3: CLSA bets on demand pick-up, AI

The brokerage house has upgraded the stock to a ‘Buy’ rating while maintaining the same target price of Rs 4,546. As CLSA sees multiple growth vectors ahead. According to the brokerage firm, the valuation of TCS looks attractive on a relative basis and the 5-year average. However, the third quarter was dismal from both growth and margin perspectives, said CLSA. The management’s commentary on demand has improved materially with a sharp pick-up in its order book. Plus, CLSA sees AI (artificial intelligence) as another key positive for demand ahead. 

2. TCS Q3: Jefferies bets on revival in discretionary spend

The brokerage firm maintained its ‘Buy’ rating on the stock with no change in the target price of Rs 4,760. In a research note, Jefferies said that the earnings were in line with estimates, but were encouraged by management comments on early signs of revival in discretionary spending (especially in North America BFSI) & healthy order book. Moreover, the company’s ramp-down of the BSNL deal may provide scope to improve margins.

3. TCS Q3: Nuvama bullish on deal wins

It raised the target price on TCS to Rs 5,200 per equity share against Rs 5,100, earlier. The brokerage firm said that the strong deal wins and management’s efforts to water down the impact of BSNL revenue as positive triggers for the stock. The revival in developed market growth and discretionary spending marks incrementally positive signs for the industry. It found TCS attractive over its peers like HCL Technologies and Infosys. Given its greater experience than peers in implementing large, complex, and mission-critical projects, the company is a serious contender for large deals. It maintained its ‘Buy’ rating on TCS post the third quarterly results. “Management remained upbeat on BFSI and retail, expecting both verticals to have bottomed out and to recover over the next few quarters,” said Nuvama in its research report. 

However, the brokerage firm slashed its FY26 earnings per share (EPS) estimates by 4.1% on lower other income, which was offset by a higher dividend rolled out by the company. 

4. TCS Q3: HSBC cautious, bets on growth signals

The brokerage firm maintained a ‘Hold’ rating on the stock, with a target price of Rs 4,540. It remarked that the company’s performance was ‘unmemorable’ despite management being optimistic about good deal wins and other growth signs. The brokerage firm sees TCS’ performance to have bottomed out, though still sees downside risk to FY26.

5. TCS Q3: Nomura neutral, eyes margin improvement in FY26

It has maintained a ‘Neutral’ rating on the stock with a slightly reduced target price of Rs 4,020. Earlier, it had a target price of Rs 4,050. The brokerage thinks that the company’s decision-making cycle is improving with signs of discretionary demand recovery in CY25. The brokerage stayed cautious about the stock as the backfill of BSNL revenue remains uncertain in FY26. The company’s margins’ improvement is likely in FY26, said Nomura in a research note.