TCS Shares Fall 2% Despite Strong Q4 Results, Brokerages Flag Growth Concerns

Shares of Tata Consultancy Services fell over 2% in early trade on Friday, even as the company reported an in-line March quarter performance with strong deal wins and stable margins.

The stock was trading at ₹2,536.40, down 2.03% in early deals, reflecting cautious investor sentiment despite broadly steady earnings. The reaction comes amid mixed brokerage views on the sustainability of growth and margins going forward.

TCS reported Q4 FY26 revenue growth of 5.4% quarter-on-quarter (QoQ) to ₹70,698 crore, beating estimates, while net profit jumped 29% QoQ to ₹13,718 crore. Margins remained stable and deal wins were robust at $12 billion during the quarter.

Brokerages Divided On Growth Outlook

Brokerages largely maintained a constructive stance on the stock, highlighting strong deal momentum, improving demand outlook and rising contribution from AI-led services. Firms such as CLSA, JPMorgan, Nomura and Goldman Sachs retained positive ratings, citing attractive valuations and long-term growth potential.

However, these brokerages also flagged modest near-term growth, with organic expansion expected at around 0.8% QoQ, indicating a gradual recovery trajectory.

HSBC maintained a 'Hold' rating, expecting steady but moderate growth, while Jefferies remained cautious with an 'Underperform' call. It highlighted weak trends in the BFSI segment, flat deal momentum and potential margin pressures due to reinvestments in AI capabilities.

While brokerages broadly agree on the long-term opportunity from AI and strong deal visibility, they remain divided on the pace of growth recovery and margin trajectory in the near term.

TCS shares have declined around 20% over the past one year, significantly underperforming the Nifty 50, which has gained about 4.2% during the same period, reflecting persistent concerns around growth visibility in the IT sector.