Tata Consultancy Services Limited (TCS) AI Stock Analysis

• Market Cap: ₹10.82T
• Dividend Yield: 3.64%
• Average Volume (3M): 239.35K
• Price to Earnings (P/E): 21.9
• Beta (1Y): 0.95
• Revenue Growth: 3.62%
• EPS Growth: 4.43%
• Country: IN
• Employees: 607,979
• Sector: Technology
• Sector Strength: 88
• Industry: Information Technology Services
• EPS (TTM): 33.37
• Shares Outstanding: 3,618,087,400
• 10 Day Avg. Volume: 255,633
• 30 Day Avg. Volume: 239,351
• PEG Ratio: 4.01
• Price to Book (P/B): 13.56
• Price to Sales (P/S): 5.03
• P/FCF Ratio: 28.57
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: ₹3,499.08
• Price Target Upside: 8.03% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 12
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 80 Outperform
• Price Target: ₹3,480.00 ▲(7.44% Upside)

Tata Consultancy Services Limited's strong financial performance is the most significant factor driving its overall score, supported by robust revenue growth, profitability, and cash flow management. The valuation is also favorable with a reasonable P/E ratio and high dividend yield. Technical analysis indicates a neutral trend, contributing moderately to the score.

Positive Factors

Revenue Growth

Strong revenue growth indicates robust market demand and effective business strategies, supporting long-term expansion and market leadership.

Profitability Margins

High profitability margins reflect efficient cost management and operational efficiency, ensuring sustained earnings power and competitive advantage.

Cash Flow Management

Strong cash flow management enhances financial flexibility, enabling reinvestment in growth opportunities and resilience against economic fluctuations.

Negative Factors

Market Saturation

Slowing revenue growth could indicate market saturation, challenging TCS to innovate or diversify to maintain growth momentum.

Competitive Pressure

Intense competition in IT services can pressure margins and market share, necessitating continuous innovation and strategic investment.

Dependence on Key Clients

Heavy reliance on key clients may pose risks if contracts are lost or renegotiated unfavorably, affecting revenue stability.

Tata Consultancy Services Limited Business Overview & Revenue Model

Company Description

Tata Consultancy Services Limited provides information technology (IT) and IT enabled services worldwide. The company operates through Banking, Financial Services and Insurance; Manufacturing; Retail and Consumer Business; Communication, Media and Technology; Life Sciences and Healthcare; and Others segments. It offers CHROMA, a cloud-based talent management solution; ignio, a cognitive automation software; TCS iON, an assessment platform; TAP, a procurement offering; TCS MasterCraft, a platform to automate and manage IT processes; Quartz, a blockchain solution; and TCS OmniStore, a commerce platform. The company also provides customer intelligence and insight solutions; Intelligent Urban Exchange, a smart city solution; OPTUMERA, a merchandise optimization platform; TwinX, an AI powered system of actionable intelligence for business leaders to simulate and optimize enterprise decisions; TCS BaNCS, a financial platform; and Jile, an agile DevOps platform. In addition, it offers drug development and connected intelligent platforms; ERP on cloud, an enterprise solution; and HOBS, a platform for subscription based digital business. Further, the company provides cognitive business, consulting, analytics and insights, automation and artificial intelligence, Internet of Things, cloud, blockchain, cyber security, interactive, digital and quality engineering, sustainability, and enterprise application services. It serves banking, financial, and public services; capital market; consumer goods and distribution; education; insurance; life sciences and healthcare; manufacturing, retail; hi-tech; travel, transportation, and hospitality industries; communications, media, and technology industries; and energy, resource, and utility industries. The company was founded in 1968 and is headquartered in Mumbai, India. Tata Consultancy Services Limited is a subsidiary of Tata Sons Private Limited.

How the Company Makes Money

TCS generates revenue primarily through its IT services and consulting offerings, which are billed on a time-and-materials basis or through fixed-price contracts. The company's key revenue streams include software development, system integration, application maintenance, and IT infrastructure services. Additionally, TCS provides business process outsourcing (BPO) services, which contribute significantly to its earnings. The company has established long-term partnerships with numerous Fortune 500 companies, which provide a steady flow of projects and contracts. TCS also invests in research and development to enhance its service offerings and maintain a competitive edge in the market, further driving its revenue growth.

Tata Consultancy Services Limited Financial Statement Overview

Summary

Tata Consultancy Services Limited demonstrates strong financial performance with significant revenue growth, high profitability margins, and efficient cash flow management. The low debt-to-equity ratio and high return on equity further highlight its financial stability and shareholder value creation.

Income Statement

Tata Consultancy Services Limited demonstrates strong financial performance with a consistent increase in revenue and profitability. The TTM data shows a significant revenue growth rate of 60.1%, indicating robust expansion. Gross profit margin and net profit margin are healthy at 44.4% and 19.2% respectively, reflecting efficient cost management and strong profitability. The EBIT and EBITDA margins are also strong, indicating effective operational efficiency.

Balance Sheet

The balance sheet of TCS is solid, with a low debt-to-equity ratio of 0.098, indicating low financial leverage and a strong equity base. The return on equity is impressive at 48.8%, showcasing the company's ability to generate substantial returns for shareholders. The equity ratio is stable, reflecting a well-capitalized structure with a significant portion of assets financed by equity.

Cash Flow

TCS exhibits strong cash flow management with a notable free cash flow growth rate of 254.5% in the TTM period. The operating cash flow to net income ratio is healthy at 0.89, indicating efficient conversion of income into cash. The free cash flow to net income ratio of 0.92 further underscores the company's ability to generate cash relative to its net income, supporting ongoing operations and potential investments.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	2.58T	2.55T	2.41T	2.25T	1.92T	1.64T
Gross Profit	1.16T	1.10T	1.08T	1.06T	914.87B	773.02B
EBITDA	719.63B	713.69B	677.30B	626.62B	568.57B	483.66B
Net Income	494.39B	485.53B	459.08B	421.47B	383.27B	324.30B
Balance Sheet
Total Assets	1.75T	1.60T	1.46T	1.44T	1.42T	1.31T
Cash, Cash Equivalents and Short-Term Investments	487.14B	408.72B	435.83B	455.26B	445.97B	364.64B
Total Debt	109.32B	93.92B	80.21B	76.88B	78.18B	77.95B
Total Liabilities	677.58B	638.58B	551.30B	524.45B	516.68B	436.51B
Stockholders Equity	1.06T	947.56B	904.89B	904.24B	891.39B	864.33B
Cash Flow
Free Cash Flow	474.28B	449.71B	416.64B	388.65B	369.54B	356.26B
Operating Cash Flow	518.53B	489.08B	443.38B	419.65B	399.49B	388.02B
Investing Cash Flow	-54.15B	-23.18B	60.26B	390.00M	-8.97B	-81.29B
Financing Cash Flow	-487.32B	-474.38B	-485.36B	-478.78B	-335.81B	-326.34B

Tata Consultancy Services Limited Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 3238.90
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IN:TCS, the sentiment is Positive. The current price of 3238.9 is above the 20-day moving average (MA) of 3143.87, above the 50-day MA of 3052.62, and below the 200-day MA of 3254.58, indicating a neutral trend. The MACD of 43.33 indicates Negative momentum. The RSI at 69.61 is Neutral, neither overbought nor oversold. The STOCH value of 80.80 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for IN:TCS.

Tata Consultancy Services Limited Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TCS	80 Outperform	₹10.82T	21.88	―	3.64%	3.62%	4.43%
LTIM	78 Outperform	₹1.67T	34.16	―	1.07%	8.72%	4.54%
INFY	76 Outperform	₹6.10T	21.63	―	2.79%	7.90%	4.28%
HCLTECH	73 Outperform	₹4.15T	24.39	―	2.85%	7.52%	0.87%
WIPRO	71 Outperform	₹2.72T	20.15	―	4.23%	1.10%	14.83%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
TECHM	55 Neutral	₹1.38T	27.80	―	2.87%	3.30%	36.78%

Tata Consultancy Services Limited Corporate Events

TCS Expands Partnership with ALDI SOUTH for Global Digital Transformation

Tata Consultancy Services (TCS) has announced an extension of its partnership with ALDI SOUTH, a leading international retailer, to drive digital transformation across multiple continents using AI-enabled cloud solutions. This strategic collaboration aims to enhance ALDI SOUTH’s IT infrastructure by improving operational stability, efficiency, and cyber resilience, while also accelerating automation. The partnership underscores TCS’s role as a key enabler in ALDI SOUTH’s digital advancement, supporting the retailer’s commitment to delivering reliable, value-driven customer experiences globally. By leveraging TCS’s expertise, the collaboration is set to modernize core systems, reduce costs, and lay the groundwork for future-ready retail operations.

TCS Faces Adverse Ruling in U.S. Court, Considers Legal Options

Tata Consultancy Services Limited has announced that the United States Court of Appeals for the Fifth Circuit has issued an adverse ruling against the company in a lawsuit filed by Computer Sciences Corporation/DXC Technology Company. The ruling confirmed the District Court’s decision on damages but vacated the previously granted injunction, directing a reassessment by the Northern District of Texas. TCS is considering its legal options, including a potential appeal, and plans to make necessary financial provisions in accordance with accounting standards.

TCS and Tata Motors Collaborate for Enhanced Sustainability Reporting

Tata Consultancy Services has partnered with Tata Motors to enhance sustainability reporting and reduce environmental impact through a five-year collaboration. Utilizing TCS’s Intelligent Urban Exchange (IUX), Tata Motors aims to automate ESG reporting and accelerate its sustainability goals, focusing on areas such as carbon accounting and regulatory compliance. This partnership supports Tata Motors’ commitment to achieving net-zero emissions and advancing sustainability across its operations and supply chain, aligning with broader industry efforts to drive decarbonization and environmental resilience.

TCS Clarifies Misleading Report on M&S Contract and Cyber Incident

Tata Consultancy Services Limited has addressed a misleading article published by The Telegraph, which inaccurately reported on TCS’s contract with Marks & Spencer (M&S) and a cyberattack incident. TCS clarified that the service desk contract with M&S was awarded through a competitive process unrelated to the cyber incident, and that the commercial aspect of the service desk is a minor part of their overall engagement with M&S. TCS also reiterated that it does not provide cybersecurity services to M&S, and the vulnerabilities did not originate from its systems.

TCS Hosts World’s Largest AI Hackathon to Drive Innovation

Tata Consultancy Services (TCS) has successfully concluded the world’s largest AI Hackathon, part of its strategy to foster an AI-first culture within the company. With participation from over 281,000 employees across 58 countries, the event showcased diversity and innovation, integrating AI solutions from top partners and TCS’s own platforms. The hackathon aims to enhance AI adoption among employees, providing them with tools and experiences to innovate and improve client solutions. The initiative has attracted interest from TCS customers, who are considering integrating hackathon-developed solutions into their products and services.

TCS Expands Partnership with Google Cloud to Integrate Gemini Enterprise AI Platform

Tata Consultancy Services has announced an expansion of its partnership with Google Cloud to integrate the Gemini Enterprise AI platform. This collaboration aims to enhance TCS’s capabilities in building AI solutions, empowering its workforce, and delivering innovative services to clients. The integration of Gemini Enterprise will allow TCS to develop custom AI agents and streamline operational workflows, reinforcing its position as a leader in AI transformation. The partnership is expected to accelerate innovation and provide significant value to TCS’s global customer base, as demonstrated by successful implementations with companies like FairPrice Group and CME Group.

TCS Publishes Q3 Financial Results in Major Newspapers

Tata Consultancy Services Limited has announced the publication of its audited consolidated and standalone financial results for the quarter ending September 30, 2025, in several major newspapers. This disclosure, in compliance with SEBI regulations, underscores TCS’s commitment to transparency and provides stakeholders with critical financial insights, potentially impacting investor confidence and market positioning.

TCS Releases Earnings Call Recording for Q2 FY26

Tata Consultancy Services Limited has released the audio recording of its earnings conference call for the quarter and six-month period ending September 30, 2025. The financial results, approved by the Board, provide insights into the company’s performance and strategic direction, potentially impacting stakeholders and market positioning.