Tata Consultancy Services (TCS) shares have risen nearly 1% to Rs 3,238 on the BSE, following the company's announcement of an ambitious roadmap to become the world's largest AI-led technology services company. This move is expected to significantly boost the company's growth and profitability in the long term.
TCS has outlined a detailed strategy to transition from traditional digital services to AI-centric enterprise transformation. The company's five-pillar framework includes internal AI transformation, redefining all services through AI, building a future-ready talent model, enabling real-world AI adoption for clients, and expanding the AI ecosystem through partnerships, M&A, and full-stack investments.
TCS's AI business has already reached significant scale, with over 5,000 AI engagements and an annualized revenue run rate of approximately USD 1.5 billion, growing 16.3% quarter-on-quarter. Notably, about 85% of TCS's large clients are already using AI solutions.
The company is redesigning service delivery models by transitioning from tool-assisted automation to agentic and autonomous AI models, aimed at improving productivity and ensuring margin sustainability. TCS has scaled up its AI capabilities across its workforce, training nearly 1,80,000 employees in advanced AI skills and increasing its advisory and consulting strength.
Despite elevated investments in AI, TCS has reiterated its margin aspiration of 26–28% and reaffirmed its shareholder return commitment of approximately 80–100% of free cash flows (FCF), underscoring financial discipline alongside innovation.
Domestic brokerage firm Nuvama has maintained a 'Buy' rating on the stock and set an unchanged target price of Rs 650, valuing the stock at 23x FY27E/28 PE. Nuvama believes TCS is well-positioned to be one of the top beneficiaries of any recovery in tech spending, driven by enterprise tech debt and cloud adoption.
Remember, this is perspective, not prediction. Do your own research and consider your own risk tolerance before making any investment decisions. The Indian IT sector, including stock market and artificial intelligence, is expected to continue growing, driven by digital transformation and cloud computing.
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