The stock sits barely 5% above its 52-week low, and the target was nudged up from Rs 2,407 set on Oct. 4.

A Quarter Carried by the Core

The headline growth was modest, but its composition is what persuaded the house. Rupee revenue rose 1.3% sequentially to Rs 73,188 crore, up 11.2% year on year, helped by a weaker rupee. International revenue accelerated to 1.2% q/q in constant currency, led by the UK at +3.5%, while North America managed only +0.4% and India slumped 10.3% as clients deferred projects.

Net profit climbed 4.0% q/q to Rs 13,884 crore, a 15.0% rise on a soft base a year earlier, and EPS reached Rs 38.4. The board declared an interim dividend of Rs 12 a share.

BFSI, the biggest vertical, was also the biggest contributor, with momentum across banking, capital markets and insurance. Manufacturing and technology and services each grew 3.1%. Consumer slipped 0.7% on selective discretionary spending, though management expects a seasonal lift in the third quarter.

Order flow stayed healthy. Total contract value came in at about Rs 92,000 crore, down 4.0% year on year, and that figure excludes the five-year Porsche deal worth roughly Rs 14,400 crore and the Best Buy captive-centre engagement. Improving win rates underpin medium-term visibility.

The Margin Ledger

The next entries look heavier. TCS is investing ahead of demand through specialised hiring, a larger bench, subcontractors and ecosystem partnerships, and those costs land before the revenue does. The MHP acquisition adds roughly 50 bps of dilution, depending on when it closes, and third-quarter furloughs are seasonal. The house now models EBIT margin at 24.0% for FY27 and 24.1% for the following two years.

From the Earnings Call

Estimates at a Glance

The house trimmed EBIT by 0.4-0.6% across FY27-29 but lifted adjusted profit by 0.3-0.6%, leaving an EPS CAGR of 6.0% over FY27-29.

Valuation and Target for Investors

TCS trades at 12.7x FY28e and 11.9x FY29e earnings, far below its long-run one-year-forward mean of 24.3x and even below the 18.9x lower band. Anand Rathi maintains BUY with a 12-month target of Rs 2,430, about 17% above the Rs 2,076 price. The house does not print the multiple behind the target; by TopNews arithmetic, it equals about 14x FY29e EPS of Rs 174.0.

For investors, the target is Rs 2,430 over 12 months, with a projected dividend yield of about 6% as a cushion. In TopNews's reading, not the house's, the stock's proximity to its Rs 1,977 low argues for building positions gradually around Rs 2,000-2,100 while revenue conversion and margin recovery remain unproven.

Risks the House Flags