Analysts Have Made A Financial Statement On Tata Consultancy Services Limited's (NSE:TCS) First-Quarter Report

Investors in Tata Consultancy Services Limited (NSE:TCS) had a good week, as its shares rose 4.3% to close at ₹4,184 following the release of its first-quarter results. It was a credible result overall, with revenues of ₹626b and statutory earnings per share of ₹33.28 both in line with analyst estimates, showing that Tata Consultancy Services is executing in line with expectations. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

Check out our latest analysis for Tata Consultancy Services

Taking into account the latest results, the consensus forecast from Tata Consultancy Services' 45 analysts is for revenues of ₹2.58t in 2025. This reflects a credible 5.9% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to rise 9.2% to ₹141. In the lead-up to this report, the analysts had been modelling revenues of ₹2.58t and earnings per share (EPS) of ₹142 in 2025. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

There were no changes to revenue or earnings estimates or the price target of ₹4,257, suggesting that the company has met expectations in its recent result. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Tata Consultancy Services, with the most bullish analyst valuing it at ₹4,800 and the most bearish at ₹3,050 per share. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Tata Consultancy Services' past performance and to peers in the same industry. It's pretty clear that there is an expectation that Tata Consultancy Services' revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 7.9% growth on an annualised basis. This is compared to a historical growth rate of 11% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 7.6% annually. So it's pretty clear that, while Tata Consultancy Services' revenue growth is expected to slow, it's expected to grow roughly in line with the industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that in mind, we wouldn't be too quick to come to a conclusion on Tata Consultancy Services. Long-term earnings power is much more important than next year's profits. We have forecasts for Tata Consultancy Services going out to 2027, and you can see them free on our platform here.

Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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