Tata Consultancy Services
TCS is India's largest IT services company, running outsourced software development, IT infrastructure and AI-led digital transformation projects for large global clients.
- P/E ~16x (vs 10yr median ~27x)
- Stock down 46% from 2024 peak
- Dividend yield 5.45%
- Headcount shrinking, margin under 24%
- Debt-free, ROE 61%
Updated on 14 Oct 2026 · Data as of 13 Oct 2026
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Snapshot
- Share price
- ₹2,257.30
- 13 Oct 2026
- 52-week range
- ₹1,961.36 – ₹3,187.34
- All-time peak
- ₹4,208.34
- 30 Aug 2024 · −46.4% from peak
- Dividend yield
- 5.45%
- Price history since
- 2002
- About 24 years of prices
What's happening
TCS's dividend record date is today, 14 October 2026, for the Rs 12/share interim dividend declared with Q2 FY27 results on 8 October (payable 30 October). Those results showed revenue of Rs 73,188 crore (+11.2% YoY, +1.3% QoQ) and net profit around Rs 13,884 crore (+15% YoY) - one outlet reported Rs 13,934 crore, but the majority of sources cluster around Rs 13,884 crore, so that is used here. Operating margin slipped to 24%, below management's own 26-28% long-term band, as the company absorbs costs from the new Porsche AG/MHP partnership and the Best Buy GCC-to-AI-Capability-Center deal.
In plain terms
TCS bills clients for technology work - writing software, running IT systems, and increasingly building AI tools for them. The tension right now: revenue and profit are still growing at double digits and the company just signed $9.6 billion of new deals, but at the same time it has cut tens of thousands of jobs over the past year and its profit margin is shrinking, not expanding. That combination - growing sales but a thinner margin and a smaller workforce - is the market trying to figure out whether AI is making TCS more efficient or just squeezing what it can charge.
Quarters
Q2 FY27 (quarter ended Sept 2026): revenue Rs 73,188 crore, up 11.2% YoY and 1.3% QoQ; net profit roughly Rs 13,884 crore, up about 15% YoY and 4% QoQ (one source reported Rs 13,934 crore - set aside as the outlier since most trackers agree on Rs 13,884 crore). Operating margin was 24%, down from the 26-28% band management aspires to, which it attributed to subcontractor costs, deal ramp-up spend and integrating the newly acquired MHP (Porsche's consulting arm). New deal bookings (TCV) were $9.6 billion, excluding the Porsche and Best Buy deals signed separately. Annualised AI-linked revenue rose to $3.1 billion (over 10% of total revenue) from $2.6 billion the previous quarter. CEO K Krithivasan called out broad-based growth across international markets.
Performance
Heads-up on splits: Tata Consultancy Services has split its shares or issued bonus shares before (most recently 2-for-1 on 31 May 2018, 2-for-1 on 16 Jun 2009 and 2-for-1 on 28 Jul 2006). A sudden price drop around a split date is usually just the price adjusting for the extra shares, not a crash.
Share price
−21.4% over 1 year
Returns by period
| Period | Tata Consultancy Services | Nifty 50 | Infosys |
|---|---|---|---|
| 3 months | +3.7% | −5.5% | −2.8% |
| 1 year | −21.4% | −9.9% | −26.2% |
| 3 years | −29.4% | +15.2% | −18.6% |
| 5 years | −28.5% | +25.1% | −28.6% |
₹100 invested on 13 Oct 2021 became…
- Tata Consultancy Services₹71
- Nifty 50₹125
- Infosys₹71
The uncomfortable fact first: despite being debt-free and highly profitable, TCS stock has badly lagged the market - down 29% over 3 years and 28.5% over 5 years while the Nifty is up 15% and 25% respectively over the same periods. The stock is down 46.4% from its all-time high of Rs 4,208 (Aug 2024) to the current Rs 2,257. There is no demerger, bonus or split since 2018 that would distort this comparison, so the fall is a genuine price correction, not a corporate-action artifact. This is largely a sector-wide reset - peer Infosys has also underperformed the Nifty by similarly wide margins over 3 and 5 years - reflecting investor concern about AI disrupting the IT services billing model industry-wide, not a TCS-only problem, though TCS's own job cuts add company-specific concern.
Dividend
Paid in the last 12 months
₹123.00 per share
Dividend yield
5.45%
Dividend yield is the last 12 months of dividends divided by today's share price. A 5.5% yield means every ₹100 of Tata Consultancy Services shares paid about ₹5.5 in dividends over the past year. Past payouts can change.
Recent dividends
| Date | Per share |
|---|---|
| 14 Oct 2026 | ₹12.00 |
| 15 Jul 2026 | ₹12.00 |
| 25 May 2026 | ₹31.00 |
| 16 Jan 2026 | ₹57.00 |
| 15 Oct 2025 | ₹11.00 |
| 16 Jul 2025 | ₹11.00 |
| 4 Jun 2025 | ₹30.00 |
| 17 Jan 2025 | ₹76.00 |
Valuation
TCS trades at roughly 15-16x trailing earnings, about 40% below its own 10-year median of ~27x and below the sector median too. It is cheap relative to its history - but separate why it's cheap from whether it's cheap: the discount reflects fears of slower growth, margin compression (24% vs the 26-28% target) and AI eroding the linear link between headcount and revenue - not balance-sheet distress, since ROE is 61.5% and ROCE 71.4% with zero debt. Whether that discount is justified depends on whether growth and margins stabilise from here.
Growth
Revenue grew 11.2% YoY, but margin fell rather than held or expanded - that makes this volume-led growth bought partly at the expense of profitability, the less durable combination per the usual rule of thumb. Headcount is shrinking even as revenue grows, which points to AI/productivity substitution reducing the old need to add people in lockstep with revenue - a structural shift worth watching rather than a one-off.
Health
Cash conversion is excellent: operating cash flow of Rs 14,190 crore was about 102% of net profit for the quarter, and TCS is debt-free with FCF of roughly Rs 43,000 crore in FY26, funding a policy of returning 80-100% of free cash flow to shareholders via dividends and buybacks. There is no financial risk here. The real risk is business risk - whether client demand, pricing, and the ongoing restructuring (job cuts) stabilise, not whether the company can pay its bills.
Ownership
Promoter Tata Sons holds about 71.7% with zero pledged shares (as of the June 2026 quarter, the latest disclosed) - a clean, stable ownership structure. FIIs hold about 9%, DIIs about 13.5%, and the public about 5%. No marquee individual investor is flagged on the register in the data checked.
The View
The one thing to watch
Whether operating margin recovers back toward the 26-28% band over the next two to three quarters as the Porsche/MHP integration costs fade - that will show whether this is a temporary investment dip or a durable shift to lower-margin, AI-driven growth.
Strengths
- +ROE of 61.5% and ROCE of 71.4% with zero debt - exceptional capital efficiency without leverage
- +Revenue grew 11.2% YoY to Rs 73,188 crore even while absorbing acquisition and ramp-up costs
- +$9.6 billion of new deal bookings this quarter plus the Porsche/MHP and Best Buy AI-Capability-Center wins show the pipeline is active
- +Cash conversion of ~102% of net profit and an 80-100% FCF payout policy keep the dividend yield at 5.45%, among the highest for a large-cap
Watchpoints
- !Operating margin fell to 24%, below management's own 26-28% aspiration, pressured by subcontractor costs and the MHP integration
- !Headcount has been cut by tens of thousands over the past year and management has said further reductions 'may continue' - a people/demand signal, not just cost-cutting
- !Stock is down 46% from its August 2024 peak and has underperformed the Nifty by a wide margin over 3 and 5 years, even though this is mostly sector-wide
- !Reported net profit figures diverge slightly across sources (Rs 13,884 crore vs Rs 13,934 crore) - worth confirming against TCS's own fact sheet before quoting a single number
How sure are we about the data? · Moderate
Revenue, margin, TCV and dividend figures were cross-checked across multiple trackers (IndiaInfoline, Genvest, Kotak Neo, Multibagg, Investing.com's earnings call transcript) and are consistent. Net profit has two competing figures circulating (Rs 13,884 crore vs Rs 13,934 crore, both described as ~15% YoY growth) - the former is used as it appears in the larger cluster of sources; BusinessToday/Business Standard's Rs 13,934 crore figure is set aside as the outlier pending a direct check of TCS's own results PDF, which could not be fetched directly. P/B ratio varies widely across sources (6.2x-10x) depending on methodology and was not independently verified - treat as 'not verified, check on Screener.' Promoter shareholding and pledge data reflect the June 2026 quarter, the latest confirmed figure found; September 2026 quarter data was not yet available in sources checked.
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Ticker Tales is not a SEBI-registered investment adviser or research analyst. This report is for learning only and is not investment advice. Data as of 13 Oct 2026.