Shares of information technology firm rose on Friday on accelerating AI-related revenue and growth in its international business.
TCS shares were up 5.2 per cent at ₹2,183.90.
India’s $315-billion software services sector is positioning itself to benefit from the rapid adoption of artificial intelligence as global enterprises expand spending on AI-led transformation initiatives.
“We like TCS’ leadership in AI implementation, and we see a clear path to further scale AI revenue as it lands more megadeals to modernize managed-services processes,” Morningstar analysts said. TCS’s annualised AI revenue jumped nearly 20 per cent quarter-on-quarter to $3.1 billion in the July-September quarter.
The investment research firm, however, reduced its fair value estimate to ₹2,360 from ₹2,400 to reflect a higher possibility of extended slowdown across consumer clients due to macro volatility.
IT companies like TCS are ramping up investments in artificial intelligence to capture this emerging demand and in an attempt to cushion AI’s impact on their core business.
Analysts at Emkay say TCS is continuing to strengthen capabilities through acquisitions and investments in frontier AI partnerships, talent, and new growth engines such as data center services, global capability centres, mid-market and sovereign cloud.
However, these investments are expected to weigh on near-term margins, the brokerage said. Emkay maintained its “add” rating and target price of ₹2,600.
The company’s earnings come amid the US government’s suspension of TCS and several other technology firms from the Permanent Labor Certification (PERM) programme.
TCS said it does not expect the suspension to have any material impact on its workforce strategy or client engagements.
TCS’s gains came amid a broader rally in the Nifty IT Index , which rose as much as 3.1 per cent on the day.