Brokerages cautious on TCS’ near-term outlook

Eye clarity on AI data centre plans, headcount, margin impact

- SAI ARAVINDH & RAM PRASAD SAHU

Shares of Tata Consultancy Services (TCS), the country’s largest information technology (IT) services company, slipped as much as 1.53 per cent on Friday before narrowing losses to close 1.1 per cent lower at around 23,028 apiece.

The decline followed the company’s second-quarter (Q2FY26) earnings, where net profit came below Street estimates, even as revenue and margins were in line.

The stock has fallen 26 per cent so far this year, compared to a 67 per cent gain in the benchmark Nifty 50. While the immediate trigger was the September quarter results, the Street going ahead will focus on TCS’ plans for an AI data centre, headcount reduction and margin impact, deal momentum, and inorganic growth opportunities. While brokerages were positive on the firm's AI pivot, they remained cautious about its near-term outlook.