Tata Consultancy Services Ltd. is Rated Hold by MarketsMOJO

Rating Context and Current Position

The 'Hold' rating assigned to Tata Consultancy Services Ltd. (TCS) was established on 22 April 2025, when MarketsMOJO revised its assessment from 'Sell' to 'Hold'. This change was accompanied by a significant improvement in the Mojo Score, which rose by 17 points from 48 to 65, signalling a more balanced outlook on the stock's prospects. It is important to note that while the rating date is fixed, the data and performance indicators referenced here are as of 09 January 2026, ensuring investors receive the most recent insights.

Quality Assessment

As of 09 January 2026, TCS maintains an excellent quality grade, reflecting its robust operational and financial strength. The company demonstrates a strong long-term fundamental position, with an average Return on Equity (ROE) of 43.49%, which is a key indicator of efficient capital utilisation and profitability. Net sales have exhibited healthy growth, increasing at an annualised rate of 10.24%, underscoring consistent demand for TCS’s software and consulting services. Additionally, the company’s low average Debt to Equity ratio of zero highlights a conservative capital structure, reducing financial risk and enhancing stability.

Valuation Perspective

Currently, TCS is rated with a very attractive valuation grade. The stock trades at a Price to Book Value (P/BV) of 10.9, which, while elevated in absolute terms, is considered a discount relative to its historical peer valuations. This suggests that the market may be undervaluing the company’s intrinsic worth compared to similar large-cap software and consulting firms. The company’s Return on Equity has improved to 47.3%, reinforcing the value proposition. Despite the stock delivering a negative return of -20.26% over the past year, TCS’s profits have grown by 4.4%, indicating resilience in earnings. The Price/Earnings to Growth (PEG) ratio stands at 5.2, signalling that growth expectations are priced in but not excessively stretched. Furthermore, the stock offers a high dividend yield of 4%, providing income-oriented investors with an attractive return component.

Financial Trend and Recent Performance

The latest data as of 09 January 2026 shows positive financial trends for TCS. The company reported record-breaking quarterly figures in September 2025, with net sales reaching ₹65,799 crore and PBDIT (Profit Before Depreciation, Interest and Taxes) hitting ₹17,978 crore. Operating cash flow for the year was also at an all-time high of ₹48,908 crore, reflecting strong cash generation capabilities. These figures indicate that TCS continues to expand its revenue base and maintain healthy profitability margins, supporting the positive financial grade assigned by MarketsMOJO.

Technical Outlook

From a technical standpoint, TCS currently holds a mildly bearish grade. The stock’s price movements over recent periods have been mixed, with a 1-day gain of 0.46%, a 1-week decline of 0.96%, and a 3-month gain of 5.13%. However, the 6-month and 1-year returns have been negative at -4.89% and -20.26% respectively, reflecting some downward pressure in the medium term. This technical assessment suggests that while the stock shows some short-term resilience, investors should be cautious of potential volatility and market headwinds in the near term.

Institutional Interest and Market Position

Institutional investors hold a significant stake in TCS, with 23.03% ownership. This level of institutional participation often indicates confidence from sophisticated market participants who have the resources to conduct in-depth fundamental analysis. Despite this, the stock has consistently underperformed the BSE500 benchmark over the past three years, including the last 12 months, where it lagged with a -20.53% return. This underperformance relative to the broader market is a key consideration for investors weighing the stock’s risk and reward profile.

What the 'Hold' Rating Means for Investors

The 'Hold' rating for Tata Consultancy Services Ltd. suggests a balanced stance for investors. It indicates that while the stock is not currently a strong buy, it is also not recommended for sale. Investors should consider maintaining their existing positions, monitoring the company’s financial performance and market conditions closely. The excellent quality and attractive valuation provide a solid foundation, but the mildly bearish technical outlook and recent underperformance relative to benchmarks counsel caution. This rating encourages investors to weigh the company’s long-term growth potential against near-term market volatility.

Summary of Key Metrics as of 09 January 2026

To summarise, the latest data shows:

• Mojo Score: 65.0 (Hold grade)


• Return on Equity (ROE): 47.3%


• Net Sales Growth (annualised): 10.24%


• Operating Cash Flow (yearly): ₹48,908 crore


• Price to Book Value: 10.9


• Dividend Yield: 4%


• Stock Returns (1 year): -20.26%


• Institutional Holdings: 23.03%

These figures collectively underpin the 'Hold' rating, reflecting a company with strong fundamentals and valuation appeal, tempered by recent price weakness and technical caution.

Investor Takeaway

For investors, Tata Consultancy Services Ltd. represents a well-established large-cap player in the software and consulting sector with a solid track record of profitability and cash generation. The current 'Hold' rating advises a prudent approach, suggesting that investors maintain their holdings while awaiting clearer signals from the market or company performance improvements. The attractive dividend yield and strong institutional backing add to the stock’s appeal for those seeking income and stability within their portfolio.

Overall, the rating and analysis as of 09 January 2026 provide a comprehensive view of TCS’s current investment profile, helping investors make informed decisions based on up-to-date data and balanced assessment.

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