TCS share price trades flat after Q3 results: Should you buy, sell or hold this Tata group stock?

TCS share price: Shares of Tata Consultancy Services traded in a tight range on Tuesday, January 13, following the announcement of the third-quarter earnings for the ongoing financial year.

The TCS share price reached the day's high of ₹3279 and a low of ₹3210.30 on the BSE so far, signalling a lacklustre trend.

The Tata group's crown jewel reported stronger-than-expected topline growth, driven by artificial intelligence-led demand, after market hours on Monday, while its bottomline was impacted by a one-time exceptional item.

TCS Q3 Results

Revenue from operations during the quarter stood at ₹67,087 crore, compared with ₹63,973 crore a year ago, reflecting a growth of 5%.

The company also reported a net profit of ₹10,657 crore, down 14% from ₹12,380 crore in the same period last year, affected by provisions for a one-time charge related to the labour code and legal claims, as well as restructuring expenses. EBIT margin for the quarter was flat at 25.2% sequentially.

TCS also announced a bumper payout in the form of ₹57 as a dividend, which included an interim dividend of ₹11 and a special dividend of ₹46.

Should you buy, sell or hold TCS shares?

Most brokerages maintained their bullish views and targets of the TCS stock price following the Q3 results announcement.

Nuvama Institutional Research said that it was a stable quarter for TCS and the stock remains a 'buy' amid attractive valuations. The revenue growth was above its estimates, while PAT was slightly lower.

But the brokerage said that TCS’s investments in Gen AI are helping it build capabilities for the future, even as its Gen AI revenues continue to accelerate, while showing impeccable control on margins.

It tweaked FY26E/27E EPS by -4.1%/+0.3%, with FY26 cut due to exceptional items, and rolled forward the valuation to 23x FY28. It has a ‘buy’ call on TCS stock with a target price of ₹3,750 (as against ₹3,650 earlier) on attractive valuations.

Motilal Oswal Financial Services (MOSL) said the revenue growth of 0.8% QoQ CC (0.3% QoQ in USD for international markets) was slightly ahead of its estimates, driven by Consumer, Energy and Utilities, Life Sciences & Healthcare, and Communication, with Europe and emerging markets offsetting seasonally weak North America.

While 4Q growth should improve as furlough impact fades, a clear demand upturn is still not visible, it added. Meanwhile, deal momentum was reasonable with $9.3 billion TCV in 3Q, including a megadeal, supporting near-term visibility.

"We expect USD revenue/EPS to compound at ~3.6%/~7.6% over FY25–28, reflecting steady growth from select demand pockets and supported by reasonable deal visibility, albeit with continued volatility in deal closures. Margins have remained stable as wage headwinds and one-offs subside, with further upside dependent on execution rather than pricing. We keep our estimates largely unchanged and reiterate BUY with a TP of ₹4,400, based on 26x FY28E EPS, implying ~36% upside," said the brokerage.

Seema Srivastava, Senior Research Analyst at SMC Global Securities, called TCS Q3 FY26 performance as resilient, marked by steady revenue growth, stable operating margins and a sharp improvement in underlying profitability despite heavy exceptional charges.

"The standout driver was AI-led growth, with annualised AI services revenue touching US$1.8 billion and growing a strong 17.3% QoQ in constant currency, underlining TCS’ success in monetising its early and broad-based investments across the AI stack. Operating margin remained healthy at 25.2%, reflecting disciplined cost management, benefits of workforce rationalisation and operational efficiencies, even as the company continued to invest in next-generation technologies and partnerships," she said.

She believes the deal momentum provides medium-term revenue visibility. "Overall, Q3 FY26 reflects TCS’ ability to sustain growth, protect margins and accelerate its transition into an AI-led services powerhouse despite near-term noise from exceptional charges."

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