Shares of Tata Consultancy Services (TCS) declined nearly 1% in early trading on October 10, following the release of its Q2FY26 results a day earlier. The IT major reported a 1.4% year-on-year rise in net profit to ₹12,075 crore, with revenue at $7.47 billion in constant currency terms—up 0.8% sequentially but down 3.3% YoY. The results met analysts’ expectations, despite a ₹1,135 crore restructuring charge, likely linked to layoffs affecting over 12,000 employees.
TCS reported a total contract value (TCV) of $10 billion, including a $640 million deal with Scandinavian insurer Tryg. Sectoral growth was led by BFSI (1.1%) and technology/services (1.8%). Margins improved, aided by currency benefits that offset salary hikes. Analysts noted that a 3% sequential reduction in headcount suggests a cost base reset, which could improve margins or support future investments.
Brokerages remain optimistic. Despite a 25% YTD decline, TCS trades at 20x FY27E—matching historical averages. Nuvama, Motilal Oswal, Nomura, and HDFC Securities maintained positive ratings, with target prices ranging from ₹3,300 to ₹3,750, citing medium- to long-term growth potential.
