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Investing.com - UBS has lowered its price target on Tata Consultancy Services Ltd. (NS:NSE:TCS) to INR3,950.00 from INR4,050.00 while maintaining a Buy rating.
The price target reduction follows TCS’s Q1 revenue decline of 3.3% quarter-over-quarter, which missed analyst expectations. The decline was primarily attributed to the BSNL deal ramp down, which accounted for 2.8% of the decrease, while the international business saw a more modest 0.5% decline.
TCS stock has underperformed its large Indian peers across multiple timeframes and has fallen approximately 21% from its peak in January 2025. Despite this underperformance, UBS notes the stock is now trading near its 10-year average price-to-earnings ratio.
The company reported a total contract value of US$9.4 billion for the quarter with a healthy deal pipeline driven by cost optimization projects. Management indicated that uncertainty around trade deals has continued to delay client decision making and deal closures.
UBS maintained its Buy rating, stating that current valuations provide comfort with limited downside risk, and management expects FY26 to perform better than FY25 for the international business despite current challenges.
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