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TCS Share Price Rises as AI Strategy Boosts Outlook

Devendra Patel

TCS Share Price Rises as AI Strategy Boosts Outlook

TCS Share Price Today: Shares of Tata Consultancy Services (TCS) were trading higher on Thursday, outperforming the broader market amid renewed investor confidence following the company’s Analyst Day 2025. At the latest count, TCS shares were up 1.38 percent, trading at ₹3,260.20 on the BSE, compared with the previous close of ₹3,217.60.

Despite today’s gains, TCS stock has faced notable pressure this year and is down nearly 21 percent in 2025 so far, reflecting broader challenges in the IT services sector such as cautious client spending, macroeconomic uncertainty, and deal decision delays. However, fresh brokerage commentary suggests that the worst may be priced in.

Axis Securities Recommends ‘Buy’ on TCS Stock

Following TCS’s Analyst Day presentation, brokerage firm Axis Securities reiterated its ‘Buy’ rating on the stock, setting a target price of ₹3,565 per share. This target implies an upside potential of over 9 percent from current levels.

Axis Securities expressed optimism about TCS’s long-term growth prospects, particularly highlighting the company’s strategic shift toward becoming an AI-driven enterprise. According to the brokerage, this transformation could serve as a key growth catalyst over the coming years.

TCS’s Strategic Shift: From Digital to AI Enterprise

In its investor presentation filed with stock exchanges, TCS management outlined a clear transition from a traditional “Digital Enterprise”—focused primarily on automation—to an “AI Enterprise” powered by reasoning, autonomy, and intelligence-led solutions.

The company revealed that its dedicated AI Services business is already generating annualised revenue of $1.5 billion, marking a strong 16.3 percent quarter-on-quarter growth. This performance underscores increasing enterprise demand for AI-led transformation solutions and positions TCS as a key beneficiary of this structural shift in global IT spending.

Five Pillars of TCS’s AI Transformation Strategy

TCS detailed its AI-focused growth strategy, which is built around five core transformation pillars:

  1. Internal transformation through AI-led productivity improvements

  2. Redefining all service offerings using intelligence-driven models

  3. Building a future-ready talent ecosystem with advanced AI skills

  4. Making AI real for clients through scalable and outcome-based solutions

  5. Expanding the AI ecosystem via partnerships and platforms

This comprehensive approach is aimed at embedding AI across every layer of TCS’s operations and client engagements.

Major Investment in Sovereign AI Infrastructure

Axis Securities also highlighted TCS’s ambitious plans to develop a sovereign AI data centre with a capacity of up to 1 gigawatt (GW). The project is expected to involve an investment of $6–7 billion over the next 5–7 years, signaling TCS’s commitment to building long-term AI infrastructure capabilities.

Such investments could strengthen TCS’s competitive positioning, especially as governments and enterprises increasingly prioritize data sovereignty and secure AI deployment.

Strong Margins and Shareholder Returns Support Valuation

Despite industry headwinds, TCS continues to maintain industry-leading profitability. The company aims to sustain EBITDA margins between 26 and 28 percent, supported by operational efficiencies and outcome-based pricing models.

Axis Securities also noted TCS’s strong financial metrics, including a Return on Equity (RoE) of 51.2 percent for FY25, significantly higher than most peers. Additionally, the company’s free cash flow generation consistently exceeds 100 percent of net profit, enabling regular dividends and shareholder rewards.

Growth Outlook and Valuation

Looking ahead, Axis Securities expects TCS’s revenue and EBIT to grow at a CAGR of 5 percent and 9 percent, respectively, over FY25–FY27, driven by steady deal wins and gradual improvement in enterprise technology spending.

The brokerage values TCS at a 23x price-to-earnings (P/E) multiple based on its FY27 estimated earnings, reflecting confidence in the company’s long-term AI-led growth strategy.

TCS Share Price: Weekly and Monthly Technical Analysis

Weekly Technical Outlook

On the weekly chart, TCS shares are showing early signs of stabilization after a prolonged correction. The stock has been forming a base near lower levels, and recent price action suggests buying interest emerging on dips. Momentum indicators indicate mild recovery, though the trend remains cautious.

Weekly Technical Levels (Indicative):

A sustained move above the ₹3,320–₹3,380 zone could attract fresh momentum buying and push the stock towards higher levels. However, failure to hold above ₹3,120 may invite short-term selling pressure.

Monthly / Positional Technical Outlook

From a monthly perspective, TCS remains a structurally strong large-cap IT stock, though it is currently trading below its long-term averages due to sector-wide weakness. The stock is attempting to build a long-term base, indicating accumulation by long-term investors at lower valuations.

Monthly Technical Levels:

If TCS sustains above the psychological ₹3,000 mark, the long-term trend remains intact. A breakout above ₹3,650 could signal a trend reversal and the start of a fresh up-move.

Technical Indicators Snapshot

Trading & Investment Strategy

 

Disclaimer: This article is for informational and educational purposes only. It does not constitute investment advice. Investors are advised to consult a certified financial advisor before making any investment decisions.

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