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TCS share price declined in early trade on Friday after the IT major announced its Q2 results; What should investors do now?
TCS Shares Post Q2
TCS Share Price: TCS share price fell 2% in early trade on Friday after the IT major announced its Q2 results. The stock declined as much as 1.53% to Rs 3,015.00 apiece on the BSE.
The company reported a net profit of Rs 12,075 crore in Q2FY26, marking a 3.8% decline from Rs 12,760 crore in the previous quarter. Revenue rose 3.7% sequentially to Rs 65,799 crore, with constant currency (CC) revenue growth at 0.8%.
At the operational level, EBIT stood at Rs 16,565 crore, up 6.8% QoQ, while EBIT margin improved by 70 basis points to 25.2%.
The board of directors declared a dividend of Rs 11 per share.
TCS also announced key strategic moves, including setting up a new business entity to build a world-class AI infrastructure featuring a 1 GW capacity data centre in India, and the acquisition of a 100% stake in ListEngage.
Brokerage Views on TCS Q2FY26 Results
Analysts remain optimistic about the stock, noting that TCS’s Q2 performance exceeded expectations. Several brokerages have raised their target prices following the results.
Goldman Sachs
Goldman Sachs retained its ‘buy’ rating on TCS with a target price of Rs 3,330, suggesting an upside of nearly 9% from the last close. The brokerage highlighted that while TCS’s headcount fell 3% sequentially, with another 1% decline expected, the company’s “strategic shift to adapt to the changing tech landscape may offset structural and cyclical pressures.” Goldman Sachs noted that TCS’s new data centre initiative, planning a 1 GW capacity over the next five to seven years, and the acquisition of Salesforce partner ListEngage, strengthen the company’s AI and capability-led growth positioning. However, it kept its FY26 revenue growth forecast unchanged at -1.4% year-on-year, calling the results a “neutral read-through” for the broader IT services sector.
Morgan Stanley
Morgan Stanley maintained an ‘overweight’ rating on TCS with a target price of Rs 3,690, indicating a potential upside of around 20.5%. The brokerage observed that TCS’s revenue, recurring EBIT, and recurring net income exceeded estimates by 0.8%, 2.8%, and 3.3%, respectively. It highlighted that constant-currency revenue grew 0.8% quarter-on-quarter, driven 60% by domestic business and 40% by international operations. Morgan Stanley also noted that the creation of a wholly owned subsidiary for AI and sovereign data centres, along with the $72.8 million acquisition of a Salesforce partner, reinforces TCS’s push toward next-generation technology services.
Motilal Oswal
Motilal Oswal kept its ‘buy’ rating on TCS with a target price of Rs 3,500, offering a potential upside of about 14%. The brokerage mentioned that while the quarter aligned with expectations, “it’s too early to assess the data centre foray” and that “core growth remains modest.” It expects TCS’s revenue, EBIT, and PAT to grow 5.8%, 7.8%, and 7.5% year-on-year, respectively, in H2FY26. Motilal Oswal added that clarity on “capital structure, capex schedule, rentals, and MOU for the data centre” will be key to evaluating the initiative’s long-term value.
Nuvama Institutional Equities
Nuvama reiterated its ‘buy’ rating with a target price of Rs 3,650, implying a potential upside of nearly 19%. The brokerage described TCS’s Q2 as a “decent quarter” and termed the 1 GW AI data centre plan a “strategic move” aligned with evolving enterprise demand. However, it trimmed FY26 and FY27 earnings per share estimates by around 2% each, citing lower growth assumptions. Nuvama noted that “near-term volatility is expected,” but maintained that “the long-term outlook remains strong.”
At 9:25 AM, TCS shares were trading 0.71% lower at Rs 3,040.15 apiece on the BSE.
Aparna Deb is a Subeditor and writes for the business vertical of Business.com. She has a nose for news that matters. She is inquisitive and curious about things. Among other things, financial markets, economy, a…Read More
Aparna Deb is a Subeditor and writes for the business vertical of Business.com. She has a nose for news that matters. She is inquisitive and curious about things. Among other things, financial markets, economy, a… Read More
October 10, 2025, 09:40 IST
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