The brokerage said that there could be a Rs 35 dividend in Q4 and a “possibility of share buyback over the next few quarters given recent changes in the Budget around favourable tax treatment for share buybacks,” it said in a report released earlier today.
Commenting on TCS’ partnership with ServiceNow, analysts said it will build industry-specific AI solutions that transform manual, fragmented processes into intelligent, autonomous workflows that learn and improve on their own. A focus area of the partnership is to apply AI in back-office functions like human resources, finance, supply chain, procurement and employee services.
Shares of Tata Consultancy Services have declined 17% over the past month, weighed down largely by mounting concerns over AI-led disruption. Earlier this month, the stock tumbled to its lowest level in more than five years and has since slipped in the mcap rankings, ceding ground to State Bank of India and ICICI Bank to become the sixth-largest company by mcap, down from fourth place. At present, TCS shares are trading about 44% below their all-time high of Rs 4,592 apiece.
For TCS, analysts have listed key downside risks such as lower-than-expected deal wins, which could lead to revenue growth coming in below estimates, as well as pricing pressure and heightened competitive intensity that may weigh on margins. An appreciation of the INR against the USD in FY26 and FY27 could also pose a headwind. Finally, an adverse macroeconomic environment in the US, stemming from uncertainty around policies, tariffs, inflation and bond yields, remains a key risk factor.
Pressure on IT shares had already been building earlier in the month after Anthropic unveiled a new AI product designed to automate a wide range of professional tasks, reigniting concerns that artificial intelligence could chip away at the profitability and long-standing competitive moats of traditional IT services companies.The company, which develops the Claude chatbot, said the product can automate several legal functions, including contract reviews, non-disclosure agreement triage, compliance workflows, legal brief preparation and standardised responses.
At the centre of the market nervousness is growing concern that AI could fundamentally reshape the competitive landscape for software and IT services firms, potentially weakening both profitability and market positioning.
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