TCS targets 25%+ FY27 exit margin as AI revenue tops $2.6 billion annualised
TCS expects improvement in Q2FY27, citing modernisation demand and AI services revenue above $2.6 billion annualised. Management is targeting an FY27 exit EBIT margin of at least 25%, evaluating capital-return options and expects a six- to nine-month BSNL ramp-up.
What happened
Tata Consultancy Services · TCS expects September-quarter improvement, supported by modernisation demand and AI services exceeding $2.6 billion annualised. It
Key facts
- TCS shares down 1.18% to Rs 2,244.50
- 52-week high Rs 3,336.70; low Rs 1,976
- JM Financial target Rs 2,284
- Legacy-modernisation deals worth $5-$10 million
- SKF deal worth $800 million over five years
- Annualised AI services revenue above $2.6 billion in Q1FY27
- FY27 exit EBIT margin target of 25% or more
- Stock at about 14.4x one-year forward consensus EPS
- BSNL ramp-up may take six to nine months
Why this matters
TCS’s outlook makes AI, cloud-modernisation and managed-services partnerships strategically attractive, particularly where retailers need scaled implementation capability rather than point-solution software.