Rating Context and Current Position
On 22 April 2025, MarketsMOJO revised Tata Consultancy Services Ltd.’s rating from 'Sell' to 'Hold', accompanied by a Mojo Score increase from 48 to 51 points. This adjustment reflects a reassessment of the company’s overall investment appeal based on a comprehensive evaluation of multiple parameters. It is important to note that while the rating change occurred several months ago, the data and performance indicators discussed below are current as of 11 February 2026, ensuring investors receive the latest insights into the stock’s standing.
Quality Assessment: Strong Fundamentals Underpin Stability
As of 11 February 2026, Tata Consultancy Services Ltd. maintains an excellent quality grade, supported by robust long-term fundamentals. The company boasts an impressive average Return on Equity (ROE) of 43.49%, signalling efficient utilisation of shareholder capital. Net sales have demonstrated healthy growth, expanding at an annualised rate of 10.21%, which underscores consistent demand for the company’s software and consulting services.
Moreover, the company’s capital structure remains conservative, with an average Debt to Equity ratio of zero, indicating a debt-free balance sheet. This financial prudence reduces risk and provides flexibility for future investments or shareholder returns. Such strong fundamentals are a key reason why the stock holds a 'Hold' rating, reflecting stability rather than aggressive growth potential at present.
Valuation: Attractive but Reflective of Market Sentiment
Currently, Tata Consultancy Services Ltd. is assigned an attractive valuation grade. The stock trades at a Price to Book Value ratio of approximately 10.1, which, while elevated, is in line with its sector peers and justified by the company’s high profitability. The latest data shows a Return on Equity of 47.3%, reinforcing the premium valuation.
Despite this, the stock’s price performance has been subdued over the past year, delivering a return of -25.30% as of 11 February 2026. This underperformance contrasts with a 4.9% increase in profits during the same period, suggesting that market sentiment may be discounting near-term challenges or broader sector headwinds. The company’s PEG ratio stands at 4.3, indicating that earnings growth is not currently priced at a steep premium, but investors should be mindful of the valuation relative to growth prospects.
Additionally, the stock offers a relatively high dividend yield of 3.7%, which may appeal to income-focused investors seeking steady returns amid market volatility.
Financial Trend: Flat Recent Results Amid Stable Fundamentals
The financial trend for Tata Consultancy Services Ltd. is characterised as flat based on recent quarterly and half-yearly results. The company reported an Earnings Per Share (EPS) of Rs 29.44 in the latest quarter, which is among the lowest in recent periods. The Debtors Turnover Ratio for the half-year stands at 4.76 times, indicating a slower collection cycle compared to historical averages.
While these metrics suggest some short-term operational challenges, the overall financial health remains intact. The company’s ability to sustain profitability and maintain a strong balance sheet supports the 'Hold' rating, signalling that investors should monitor developments but need not take immediate action based on current trends.
Technical Outlook: Bearish Momentum Counsels Caution
From a technical perspective, the stock is currently graded as bearish. Price action over the past month and quarter has been negative, with declines of 7.68% and 2.84% respectively, and a year-to-date drop of 7.62%. The one-year return of -25.30% further highlights the downward momentum. This technical weakness suggests that the stock may face resistance in the near term, reinforcing the rationale for a 'Hold' rating rather than a more optimistic stance.
Investors should consider this alongside the company’s strong fundamentals and attractive valuation, recognising that technical factors may limit upside potential in the short run.
Institutional Interest and Market Position
Institutional investors hold a significant stake in Tata Consultancy Services Ltd., with 23.25% ownership. This level of institutional interest often reflects confidence in the company’s long-term prospects and provides a stabilising influence on the stock price. These investors typically have greater resources and expertise to analyse company fundamentals, which can be reassuring for retail investors.
However, it is noteworthy that the stock has consistently underperformed the BSE500 benchmark over the past three years, including the last 12 months. This persistent underperformance suggests that while the company remains fundamentally sound, it faces competitive or sector-specific challenges that have constrained its market returns.
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What the 'Hold' Rating Means for Investors
The 'Hold' rating assigned to Tata Consultancy Services Ltd. by MarketsMOJO indicates a balanced view of the stock’s prospects. It suggests that while the company exhibits strong quality and attractive valuation metrics, certain factors such as flat recent financial trends and bearish technical signals counsel caution.
For investors, this rating implies that the stock is not currently a compelling buy, but neither is it a sell candidate. It is best suited for those who already hold the stock and are seeking to maintain their position while monitoring developments. New investors might consider waiting for clearer signs of technical recovery or improved financial momentum before initiating a position.
In essence, the 'Hold' rating reflects a prudent approach, recognising the company’s solid fundamentals but also acknowledging the challenges that temper near-term upside potential.
Summary of Key Metrics as of 11 February 2026
To recap, the latest data shows:
- Mojo Score: 51.0 (Hold grade)
- Return on Equity: 43.49% average, 47.3% latest
- Net Sales Growth: 10.21% annualised
- Debt to Equity Ratio: 0 (debt-free)
- Price to Book Value: 10.1
- EPS (Quarterly): Rs 29.44
- Dividend Yield: 3.7%
- Stock Returns: 1 Year -25.30%, YTD -7.62%
- Institutional Holdings: 23.25%
These figures collectively underpin the current 'Hold' rating, providing investors with a comprehensive view of the stock’s standing in the market today.
Looking Ahead
Investors should continue to monitor Tata Consultancy Services Ltd.’s quarterly results and market developments, particularly focusing on improvements in financial trends and technical indicators. Any sustained positive shifts could warrant a reassessment of the rating in the future. Until then, the 'Hold' rating remains a measured recommendation reflecting the company’s current balance of strengths and challenges.
Sector and Market Context
Operating within the Computers - Software & Consulting sector, Tata Consultancy Services Ltd. is a large-cap company with a significant market presence. The sector itself has experienced volatility amid global economic uncertainties and evolving technology demands. The stock’s recent underperformance relative to the BSE500 benchmark highlights the competitive pressures and market dynamics at play.
Investors should weigh these external factors alongside company-specific fundamentals when considering their portfolio allocations.
Conclusion
In summary, Tata Consultancy Services Ltd.’s 'Hold' rating by MarketsMOJO, last updated on 22 April 2025, reflects a nuanced view of the stock’s current investment appeal. As of 11 February 2026, the company demonstrates excellent quality and attractive valuation, tempered by flat financial trends and bearish technical signals. This balanced outlook advises investors to maintain existing positions with caution and await clearer signs of momentum before increasing exposure.
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