TCS shares jump 3%, extend gains to day two after Q1 earnings. Should you buy, sell or hold?

Shares of Tata Consultancy Services (TCS) jumped around 3% on Monday, extending sharp gains for the second consecutive session after India’s largest IT company released its results for the April-June quarter of FY26. The IT bellwether reported last week 5% year-on-year (YoY) growth in consolidated net profit to Rs 13,349 crore for the first quarter of the ongoing financial year 2027. The company’s consolidated net profit stood at Rs 12,760 crore in the corresponding quarter of the previous financial year. The firm’s revenue from operations, meanwhile, rose around 14% YoY to Rs 72,275 crore during the quarter under review, as against Rs 63,437 crore in the year-ago period. Its total contract value in Q1 FY27 stood at $9.5 billion. Along with the Q1 earnings, TCS declared an interim dividend of Rs 12 per share, with a face value of Re 1 apiece. The IT bellwether said that its board of directors declared the dividend, which will be paid by July 31 to the eligible shareholders. The record date to determine the eligibility of shareholders set to receive the payment has been fixed on July 15 (Wednesday). “Q1 FY27 reflects continued growth momentum and the strength of our strategic positioning, despite geopolitical and macro-economic headwinds. We delivered a strong order book of $9.5 billion, including a marquee AI-led transformation deal with SKF, while continuing to add clients across key revenue bands and scaling our AI business to a $2.6 billion annualized revenue run rate. As customers accelerate investments in AI, modernization, cybersecurity, sovereign cloud and platform simplification, our strong deal conversion, improving client mining and expanding ecosystem partnerships position TCS well to translate opportunity into sustained growth,” said TCS CEO K Krithivasan. Should you buy, sell or hold TCS shares? Morgan Stanley has an ‘Equal weight’ rating on the shares of TCS with a target price of Rs 2,200 apiece, implying more than 6% upside potential from the previous closing price of Rs 2,069 apiece. The international brokerage said the company’s Q1 FY27 performance was in line to slightly ahead of expectations, while management's commentary for the second quarter was modestly positive. Citi however has a ‘Sell’ rating on TCS shares, with the international brokerage cutting its target price to Rs 1,825 from Rs 1,965 after the earnings announcement, citing weak growth prospects and subdued international revenue momentum. The latest target price implies a downside potential of about 12%. Nuvama, Motilal Oswal Financial Services and Dolat Capital meanwhile have ‘Buy’ ratings for the shares of TCS, with target prices implying upside potential of up to 45% from the previous closing price. Emkay has an ‘Add’ rating. TCS share price TCS shares jumped 3% to trade at Rs 2,129 apiece on Monday morning. The shares of the IT major have gained more than 3% in one week, but have fallen around 2% in one month and 34% in 2026 so far. In the longer term, the shares of TCS have delivered negative returns of 35% in one year, 36% in three years and 33% in five years. The company has a market capitalisation of nearly Rs 7.7 lakh crore.