TCS: Macquarie Sees 27% Upside

TCS to outperform Infosys in growth.

Macquarie has issued an ‘outperform’ rating on Tata Consultancy Services (TCS) shares, setting a target price of ₹5,740, indicating a 27% potential increase from its previous close. According to the brokerage, TCS is expected to outpace Infosys in growth during FY26 and FY27. Macquarie anticipates that TCS will benefit from a recovery in spending, particularly on cloud migration projects, which are likely to involve a combination of application and infrastructure services. The note emphasizes that TCS is in a stronger position than Infosys to capitalize on this trend.

On Tuesday, September 18, Tata Consultancy Services (TCS) shares closed flat at ₹4,511. Year-to-date, the stock has risen over 18%, slightly outperforming the NSE Nifty 50, which gained around 17% in the same period. In contrast, Infosys shares have surged nearly 26% this year, also ending flat at ₹1,950 on Tuesday. Indian IT companies, including TCS and Infosys, are facing challenges due to sluggish client spending on IT infrastructure upgrades in the U.S. Many are hoping for a shift in U.S. Federal Reserve monetary policy to help stimulate the economy and drive corporate investment.

In July, Tata Consultancy Services (TCS) reported Q1 FY25 financial results (April-June) that exceeded analyst predictions, leading to significant brokerage upgrades and revised target prices. The IT giant’s revenue from operations grew 5% to ₹62,613 crore for the June quarter, up from ₹59,381 crore in the same period last year. Additionally, net profit increased by 9%, rising to ₹12,040 crore from ₹11,074 crore in the previous year.