TCS shares rally 6% after multi-million ABB AI deal, Q1 earnings. What’s next?

Shares of Tata Consultancy Services (TCS) soared around 6% on Monday after the company announced a multi-million, multi-year deal with ABB to transform global network operations with artificial intelligence.

The stock climbed to an intraday high of Rs 2,199.90, extending gains for a second consecutive session following the IT major's better-than-expected June quarter earnings, announced last week.

TCS and ABB sign multi-million deal

TCS announced that it has signed a multi-million, multi-year deal with ABB to scale its role from managing infrastructure and applications to delivering end-to-end global network operations, through an integrated network-as-a-service model.


As part of the deal, the IT bellwether will help ABB improve user experience, enhance operational efficiency, strengthen security and compliance, scale service delivery, and prepare for next-generation digital operations. ABB’s Future Network Model programme, an enterprise-wide initiative to transform its global network into a standardised, centrally managed digital infrastructure, is at the centre of this partnership. As a strategic programme partner, TCS will design, integrate, and run ABB’s global network ecosystem as a secure, modern, and AI-driven service. It will also orchestrate ABB’s multi-vendor environment to ensure seamless, standardised operations worldwide, the company said.

“For over two decades, TCS has had the privilege of supporting ABB’s transformation journey, and the Future Network Model marks the next chapter in this partnership. With AI embedded into the network operations model, supported by secure digital infrastructure and our deep domain expertise, we are bringing our 'infrastructure to intelligence' approach to build a resilient, intelligent network backbone. Through this engagement, we will enable network systems that can sense, adapt, and improve continuously, while strengthening reliability, security, user experience, and scale as ABB continues to advance as a future-ready enterprise,” said Anupam Singhal, President of Manufacturing, TCS.

ABB Group CIO Alec Joannou meanwhile said that the model represents an important milestone in reinforcing the digital foundation of ABB’s global operations. “As our business evolves, it is critical to have an ecosystem that is resilient, secure, and aligned with long-term transformation goals. Our association with TCS reflects a shared focus on delivery excellence, continuous enhancement, and building capabilities that can support our strategic priorities,” he added.

TCS Q1 earnings

The IT bellwether reported last week 5% year-on-year (YoY) growth in consolidated net profit to Rs 13,349 crore for the first quarter of the ongoing financial year 2027. The company’s consolidated net profit stood at Rs 12,760 crore in the corresponding quarter of the previous financial year.

The firm’s revenue from operations, meanwhile, rose around 14% YoY to Rs 72,275 crore during the quarter under review, as against Rs 63,437 crore in the year-ago period. Its total contract value in Q1 FY27 stood at $9.5 billion.

Along with the Q1 earnings, TCS declared an interim dividend of Rs 12 per share, with a face value of Re 1 apiece. The IT bellwether said that its board of directors declared the dividend, which will be paid by July 31 to the eligible shareholders. The record date to determine the eligibility of shareholders set to receive the payment has been fixed on July 15 (Wednesday).

Also read: TCS Q1 Results | Profit rises 5% YoY to Rs 13,349 crore; co declares Rs 12/share dividend

“Q1 FY27 reflects continued growth momentum and the strength of our strategic positioning, despite geopolitical and macro-economic headwinds. We delivered a strong order book of $9.5 billion, including a marquee AI-led transformation deal with SKF, while continuing to add clients across key revenue bands and scaling our AI business to a $2.6 billion annualized revenue run rate. As customers accelerate investments in AI, modernization, cybersecurity, sovereign cloud and platform simplification, our strong deal conversion, improving client mining and expanding ecosystem partnerships position TCS well to translate opportunity into sustained growth,” said TCS CEO K Krithivasan.

Should you buy, sell or hold TCS shares?

Morgan Stanley has an ‘Equal weight’ rating on the shares of TCS with a target price of Rs 2,200 apiece, implying more than 6% upside potential from the previous closing price of Rs 2,069 apiece. The international brokerage said the company’s Q1 FY27 performance was in line with or slightly ahead of expectations, while management's commentary for the second quarter was modestly positive.

Citi, however, has a ‘Sell’ rating on TCS shares, with the international brokerage cutting its target price to Rs 1,825 from Rs 1,965 after the earnings announcement, citing weak growth prospects and subdued international revenue momentum. The latest target price implies a downside potential of about 12%.

Nuvama, Motilal Oswal Financial Services and Dolat Capital, meanwhile, have ‘Buy’ ratings for the shares of TCS, with target prices implying upside potential of up to 45% from the previous closing price. Emkay has an ‘Add’ rating.

Also read: What are Morgan Stanley, Citi and other brokerages saying after TCS Q1 results?

TCS share price

TCS shares jumped more than 6% to trade at Rs 2,199.90 on Monday. The shares of the IT major have gained more than 6% in one week and more than 1% in one month, but are down 32% in 2026 so far.

In the longer term, the shares of TCS have delivered negative returns of 33% in one year, 35% in three years and 31% in five years. The company has a market capitalisation of nearly Rs 7.9 lakh crore.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)