Tata Consultancy Services Ltd (TCS) shares have extended slide in the past one month, falling 11.23 per cent, taking their 2026 fall to 29.05 per cent and one-year decline to 34.92 per cent. The stock is in news on Tuesday after IT major reportedly rolled out an average salary hike of about 5 per cent in the company’s latest appraisal cycle. TCS currently employs around 5,84,519 people globally. 

Arihant Capital Markets in its latest note sees 20 per cent upside potential on TCS. It believes Indian IT stocks, at present, a compelling buying opportunity at current levels, trading at a significant discount of 30 per cent to their 3- and 7-year historical average P/E multiples. The ongoing rupee depreciation, with exchange rate currently at INR 96.38 in against Rs 85.6 a year ago — a 12.5 per cent depreciation in just one year — provides a direct and meaningful earnings tailwind, the brokerage said.

"Since Indian IT companies earn predominantly in USD while incurring costs in INR, every rupee of depreciation directly boosts reported revenues, margins and EPS without any additional operational effort," it said while suggesting a target of Rs 2,752 on TCS, with a 'Buy' rating.

The brokerage also has 'Buy' on Infosys (Target price: Rs 1,438) and Birlasoft Ltd (Target price: Rs 411). 

Kotak Institutional Equities in a recent note said the March quarter results were mildly disappointing for IT firms after relative stability in the preceding few quarters. The combination of minor miss in growth estimates, unexciting TCV, guidance below expectations and reality of GenAI-led revenue deflation will keep pressure on multiples intact. 

"IT firms are making reasonable headway in AI-driven opportunities, although it will not be enough to compensate for deflation headwinds. Offsetting growth headwinds amid high competitive intensity will be challenging. Margin headwinds are manageable by further flexing cost levers. Top picks are TCS, TechM and Infosys among Tier 1 and Hexaware and Coforge among mid-tier," it said.

This brokerage noted that TCS' revenue grew 1.2 per cent sequentially (0.8 per cent organic), leading growth among Tier 1. It said TCS remains vulnerable to GenAI disruptions given incumbent status. "Healthy AI capabilities and domain expertise, strong client relationships and experience of navigating technology cycles will ensure growth similar to industry. Valuations are cheap and attractive," it said.