Tata Consultancy Services (TCS) reported its Q4 FY25 earnings, showcasing a mix of strong deal wins and challenges in key markets. Here's a comprehensive look at the results and insights from leading brokerages.

Tata Consultancy Services (TCS) reported its financial results for the fourth quarter of FY25, showing a mixed performance. The company's revenue came in at ₹64,479 crore, reflecting a 5.3% year-on-year growth, but slightly below market expectations. Net profit for the quarter stood at ₹12,224 crore, registering a 1.7% decline compared to the same period last year and missing analyst estimates. The operating margin came in at 24.2%, while the net profit margin stood at 19%.

TCS secured deals worth $12.2 billion in total contract value (TCV), down from $13.2 billion in the corresponding quarter last year, but still considered strong by analysts. The North America business saw some pressure due to macroeconomic uncertainty, including delays in client decision-making and cuts in discretionary spending. However, emerging markets showed relatively stronger growth.

The company’s employee base at the end of the quarter stood at 607,979, with a moderated attrition rate of 13.3%. TCS also announced a final dividend of ₹30 per share, subject to shareholder approval.

Here's how top brokerages are interpreting the latest earnings and what they forecast for the stock.

UBS: Buy | Target Price: Rs 4,250

UBS remains bullish on TCS, retaining a "Buy" rating with a target price of Rs 4,250. The firm acknowledged that Q4 results were marginally below expectations. However, it highlighted the strong total contract value (TCV) of $12.2 billion as a positive. Particularly encouraging was the record-high North America order book of $6.8 billion. Despite macroeconomic uncertainty, UBS noted that TCS management sees FY26E as potentially stronger than FY25.

Nomura: Neutral | Target Price Cut to Rs 3,490

Nomura downgraded its view slightly, maintaining a "Neutral" stance while trimming the target price to Rs 3,490. It cited more misses than hits in Q4 and pointed out the continued haziness in growth visibility for FY26F. Though TCS management is optimistic about FY26E being better than FY25, Nomura cut its EPS estimates for FY26-27F by 2-3%. The stock now trades at 21.4x its FY27F EPS, suggesting limited near-term upside.

Goldman Sachs (GS): Buy | Target Price Cut to Rs 3,960

Goldman Sachs maintained its "Buy" rating but reduced its target price to Rs 3,960. The Q4 performance, according to GS, saw revenue growth and EBIT margins slightly below estimates. The flat headcount and deferred wage hikes are interpreted as signs of an uncertain growth environment. TCS is reportedly facing delays in client decision-making and some ramp-downs in ongoing projects, alongside reduced discretionary spending.

Jefferies: Hold | Target Price Cut to Rs 3,400

Jefferies took a cautious stance, maintaining a "Hold" rating while lowering its target price to Rs 3,400. The brokerage flagged that Q4 results missed expectations across the board, with the margin miss being the most concerning. Growing pressure on discretionary IT spending and delays in decision-making are seen as key challenges. Jefferies also cut its EPS estimates for FY26 and FY27 by 3.5%.

While TCS continues to sign strong deals, the cautious tone from management and muted Q4 performance have led to mixed reactions from brokerages. The overarching theme is one of cautious optimism, with hopes that FY26 might see better momentum—but not without risks and headwinds.

Disclaimer:

This article is for informational purposes only and does not constitute investment advice. The views expressed are based on brokerage reports and market analysis as of the date of publication. Readers are advised to consult their financial advisor before making any investment decisions.