TCS
Large CapTata Consultancy Services Limited
IT
Tata Consultancy Services Limited (TCS) is a global IT services, consulting, and business solutions organization. It leverages deep technology excellence, industry context, and a skilled talent base to deliver end-to-end transformation journeys for clients, with a strong focus on AI-led engineering and a full spectrum play from infrastructure to intelligence.
One read, four checks
75+ is strong, 60-74 is usable, 45-59 is mixed, and below 45 needs caution. These are research lenses, not buy/sell instructions.
Investable fundamentals, management trust is acceptable, price trend argues for patience, and recent execution is consistent.
Fundamental lens: valuation, quality, growth, balance sheet, and cash flow.
medium confidence · 3/36 claims checked
Timing lens: price trend and sector relative strength.
Rolling lens: recent quarterly delivery, not the latest single-result score.
Quarter ended 31 Mar 2026
Good · 65/100Rev +10% YoY · PAT +12% YoY · margin expansion · +5% QoQ
| Metric | This quarter | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹70,698 Cr | +9.7% | +5.4% |
| EBITDA | ₹19,276 Cr | +13.5% | +5.5% |
| Operating margin | 27.0% | +100 bps | +0 bps |
| PAT | ₹13,784 Cr | +12.1% | +28.6% |
| PAT margin | 19.5% | +43 bps | +352 bps |
NDF means not disclosed in the current structured filing feed. It is intentionally not treated as zero.
Where growth can come from, and what can break the case
TCS reports strong Q4 FY26 sequential CC revenue growth of 1.2% to $7.621B, with an operating margin of 25.3%. Full-year FY26 CC revenue declined 2.4% to $30.017B, but operating margin expanded to a 4-year high of 25%. Order book was robust at $12B TCV in Q4, including three mega deals.
Despite a full-year revenue decline, Q4 showed broad-based sequential growth across major markets and segments, driven by strong deal wins and accelerating AI services. Management's focus on strategic investments and operational rigor supports future growth and margin stability, with positive outlook for FY27.
AI Services Acceleration
Momentum we see in our AI Services, which continued to accelerate impressively, standing at US$2.3 billion on an annualized basis.
HyperVault Business
HyperVault Business has made significant progress this quarter on its journey to build out 1 GW of capacity, winning customer commitments, land parcel finalizations and partnering agreements.
New Age Services & Adjacencies
Using new age services & adjacencies that enable enterprises to ‘Get ready for AI’.
Vendor Consolidation & Market Share Gains
Capitalizing on AI led renewals, vendor consolidation and cost optimization deals resulting in market share gains.
HyperVault Capacity Build-out
HyperVault Business has made significant progress this quarter on its journey to build out 1 GW of capacity. Partnered with Open AI to build 100 MW capacity, with an option to scale to 1 GW.
Accelerated Enterprise AI Adoption
FY26 was a pivotal year for enterprise AI adoption across industries. The shift from experimentation to scaled AI deployment showed a marked improvement.
Currency Translation Benefit
Currency was also supportive during the quarter, providing a translation tailwind of around 110 basis points to Q4 operating margin.
Improved Realizations
We saw an improvement in realizations driven by continued focus on value-led delivery, contributing a benefit of around 40 basis points to Q4 operating margin.
Strong Deal Momentum
Strong deal momentum across new services in Enterprise Transformation, Digital Engineering, and Cloud Modernization.
Intensifying Geopolitical Conflicts & Macro Uncertainty
Delivered strong 1.2% sequential growth in the backdrop of intensifying geopolitical conflicts and macro-economic uncertainty.
Caution in BFSI Spending
Increased uncertainty around interest rates, inflation, and central bank actions influenced client sentiment, resulting in cautious investment decision-making in BFSI.
Manufacturing Client Caution
Client demand across Manufacturing remained cautious in Q4, shaped by macroeconomic uncertainty, tariff volatility, recalibration of EV demand, and continued restraint in capital expenditure.
Utilities Segment Stress
The Utilities segment is experiencing stress, and significant cost optimization opportunities are opening up.
Geopolitical Situation Impact
Direct impact from the geopolitical situation so far has been restricted to Middle East and to some extent into our travel and transportation industry.
Potential Supply Chain Disruption
If things continue and if it results in further supply chain disruption or any other secondary issues, it may have an impact.
AI-led Deflation
High expectations around some AI-led deflation, where AI revenues need to overcompensate for reduction in traditional revenue.
What management said, and what results must prove
Issuer guidance and extracted claims are tracked against later reported outcomes. Treat these as management statements, not IndiaPulse forecasts.
QoQ is crucial for assessing sequential momentum, especially in a dynamic IT services environment where project execution and demand shifts can be rapid. YoY provides context for overall annual performance and margin trends.
Q4 Constant Currency Revenue Growth (QoQ)
We delivered a strong 1.2% sequentially on a constant currency (CC) basis.
Q4 Operating Margin
Our Q4 operating margin stood at 25.3%, a sequential increase of 10 basis points.
Q4 Total Contract Value (TCV)
Our order book performance was also very strong in Q4, with $12 billion in TCV including three mega deal wins.
Annualized AI Services Revenue
The momentum we see in our AI Services, which continued to accelerate impressively, standing at US$2.3 billion on an annualized basis.
Positive Outlook for FY27
We are quite positive about FY27, quite positive about the international growth. We are looking at a regular Q1, regular Q2 that we are used to seeing.
Commitment to Growth with Profitability
Our focus will be to ensure growth with profitability, so we'll not be shying away from making the right investments for ensuring strategic growth.
AI as a Net Accretive Factor
Our expectation is AI will be net accretive. Our attempt would be to ensure that we arrest the degrowth while the AI revenue increase.
Strategic Partnerships for AI
With all model companies, it's extremely important for us to build a strategic partnership. We are trying to shape these partnerships differently than traditional GTM partnerships.
Numbers and claims to verify in the next filings
| Checkpoint | Current evidence | What to verify next |
|---|---|---|
| Sequential Revenue Growth (CC) | 1.2% QoQ in Q4 FY26 | Sustained positive momentum in Q1 and Q2 FY27, indicating broad-based recovery. |
| Order Book TCV | $12 billion in Q4 FY26 | Continued strong deal wins, especially mega deals, to support future revenue growth. |
| Annualized AI Services Revenue | US$2.3 billion | Acceleration in AI revenue growth and its contribution to overall revenue, offsetting potential deflation in traditional services. |
| Operating Margin | 25.3% in Q4 FY26, 25% for FY26 | Ability to maintain margins within a tighter reach (towards 26% longer-term) despite wage hikes and continued investments. |
Verification checkpoints are IndiaPulse research interpretation, not investment advice.
Show extracted source claims
TCS expects immediate margin headwinds in FY27 from annual salary increments to be in the range of 150 to 200 basis points.
"range of 150 to 200 basis points"
TCS aims to move its operating margins towards 26% on a longer-term basis.
"move towards 26%, but on a longer-term basis"
TCS has partnered with OpenAI to build 100 MW of AI capacity, with an option to scale up to 1 GW in the future.
"build 100 MW capacity, with an option to scale to 1 GW"
TCS expects that most known client-specific headwinds are behind them and does not expect major new headwinds going forward.
"most of the headwinds we know probably are behind us"
TCS aspires to become the world's largest AI-led technology services company by capitalizing on AI-led renewals, vendor consolidation, and cost optimization.
"aspires to be the World’s largest AI led Tech Services company"
TCS will continue to accelerate the deployment of its five-pillar AI strategy as it moves into FY27.
"continue to accelerate deployment of our five-pillar AI strategy"
TCS expects a regular Q1 and Q2, with a stronger first half (1H) of the fiscal year as its planning assumption.
"expecting a stronger 1H"
TCS expects AI-related services to be net accretive to revenue growth in fiscal 2027, helping to arrest degrowth.
"expectation is AI will be net accretive"
Trend score and candlestick chart
43NeutralSMA20 -8.8% / mo · near 52W low
Technical chart
TCSweekly · 6M-33.2%Technical trend read
Bearish setupTrend is weak — long-term trend unclear. RSI 32.
- SMA20 falling (~9.7% over last month) — short-term momentum negative.
- RSI(14) at 32 — falling, no extreme reading.
- MACD above signal but histogram contracting — bullish momentum cooling.
- Within 5% of 52-week low — testing support.
Mechanical read from the price + indicator series above. Not a recommendation — technical setups can reverse without warning, especially around earnings and macro events.
Valuation, score drivers, trust methodology, financials, and peers
Use these sections after reviewing the decision summary, latest result, thesis, management accountability, and technical timing above.
Fundamental score breakdown
UNDERVALUEDWhy this score?
Top U-Score contributors and drags from the latest stored fundamentals.
Positive drivers
- FCF yield is supportive at 5.2%.
- Piotroski is strong at 8/9.
- Fair-value margin of safety is positive at 47.8%.
Main drags
- Growth is weaker at 11/25; verify the latest quarterly trend.
- Valuation is weaker at 16/30; verify the latest quarterly trend.
- Cash flow is weaker at 7/10; verify the latest quarterly trend.
IT valuation: PE and EV/EBITDA against growth and margins
Asset-light IT companies deserve valuation support only when growth, margins, and cash conversion hold up.
Stored run vs live recompute
This shows the stored score trend when snapshots exist, and also compares the latest stored nightly score with a live recompute from current fundamentals and price.
Score history
12 stored score snapshots. Latest stored move: +0 points.
Factor attribution
Trust asks: does management behaviour match later outcomes? Higher is better, but confidence and evidence depth matter as much as the number.
Healthy Trust: Management has 100% delivered/partly-delivered outcomes on 3 checked claims. It ranks around the 67th percentile of the scored universe and 60th percentile within IT. No major sub-score weakness stands out.
Healthy Trust: 3/36 extracted management claims have outcome checks; 0% were fully delivered and 3 were partially delivered.
Generally investable credibility. Look for weak sub-scores before increasing position size.
overall median 67 · IT: 60th pctile, median 68 · Large: 43rd pctile, median 74
3/36 claims checked. Use as directional, not final.
3/36 claims checked · No contradicted claim yet
How to read this Trust Score
Healthy Trust · medium confidenceRead Trust alongside U-Score, result consistency, and technical trend. A cheap stock with weak Trust needs a larger margin of safety; a high Trust score does not make an expensive stock attractive by itself.
Forensic breakdown
Read low sub-scores as due-diligence warnings, not automatic sell signals.
Trust positives
- ▸Promoter holding is 71.8%.
- ▸Promoter pledge is zero.
- ▸FCF yield is 5.2%.
- ▸12 years of positive FCF.
Trust risks
- ▸No major Trust Lite risk flags.
Intrinsic value
Fundamentals
Valuation
- P/E
- 14.90
- P/B
- 7.27
- EV/EBITDA
- 10.13
- Market Cap
- 778626.00Cr
Profitability
- ROE
- 51.80%
- ROCE
- 63.00%
- ROA
- 27.30%
- Dividend Y
- 2.97%
Growth (CAGR)
- Revenue 5Y
- 10.00%
- EPS 5Y
- 9.00%
- Revenue 3Y
- 6.00%
- EPS 3Y
- 8.00%
Balance Sheet
- Debt/Equity
- 0.11
- Interest Coverage
- 59.00×
- Altman Z
- 9.83
- Book Value
- 296.00
Cash Flow
- FCF Yield
- 5.16%
- FCF Positive Y
- 12/5
- OCF
- 52094.00 Cr
- EPS TTM
- 136.01
Shareholding
- Promoter Hold
- 71.77%
- Promoter Pledge
- 0.00%
- Momentum 52W
- 1%
Financial History
Updated 9/6/2026
Revenue
₹ CrNet Profit
₹ CrReturn on Equity
%Peers
Business-comparable peers in IT — ranked by industry, sub-sector, theme-tag overlap, market cap, and U-Score similarity. Green cells mark the best available peer metric in this table.