Shares of Tata Consultancy Services (TCS) gained nearly 3% on Monday, August 25, after global brokerage firm JPMorgan upgraded the stock to “overweight” from “neutral”. The firm also raised its price target to ₹3,800 per share from ₹3,650, signaling a 24.4% upside from Friday’s closing price of ₹3,054.7.
Why JPMorgan Turned Positive on TCS
According to JPMorgan, TCS has underperformed Nifty by 29% and Nifty IT by 6% in 2025 so far. This underperformance was mainly due to successive earnings downgrades, weak revenue growth, and narrowing profit margins.
However, the brokerage emphasized that TCS’s business model remains intact. It expects a growth recovery in the second half of FY26, supported by margin improvements and better global business sentiment.
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Growth and Earnings Outlook
JPMorgan has moderated its international constant currency growth forecast to 0% for FY26 and 5% for FY27, but increased its margin estimates by 55 basis points in FY26 and 57 basis points in FY27. This margin expansion is expected to drive a 2%–3% earnings-per-share (EPS) upgrade over the next three years.
The brokerage believes that TCS’s growth expectations have bottomed out and the company is positioned to benefit from a potential turnaround in IT demand.
Market Insights & Update
The upgrade boosted market sentiment, with TCS emerging among the top gainers on the Nifty 50. Analysts note that a recovery in the IT sector could further drive momentum in large-cap IT stocks, especially with global clients resuming discretionary spending.
Key Insights:
JPMorgan upgrades TCS to overweight from neutral.
Target price raised to ₹3,800 per share (24% upside).
Growth recovery expected from H2 FY26.
EPS upgrade of 2%–3% projected over 3 years.
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