Nuvama has reaffirmed its positive stance on Tata Consultancy Services by maintaining its Buy rating while simultaneously raising the target price to ₹3,750 from the previous target of ₹3,650.

Brokerage Recommendation Details

The brokerage firm's latest research note reflects continued optimism about the IT services major's growth trajectory. The target price revision represents an upward adjustment of ₹100.00, indicating strengthened conviction in the company's valuation prospects.

Investment Outlook

The maintained Buy rating coupled with the enhanced target price suggests that Nuvama continues to view TCS favorably in the current market environment. The upward revision in the target price indicates the brokerage's assessment of improved value potential for the stock.

This recommendation update provides investors with Nuvama's latest perspective on TCS's investment attractiveness, with the revised target price serving as a key reference point for potential returns.

Tata Consultancy Services has shared its margin optimization strategy during a recent conference call, outlining plans to move closer to its desired operating margin range while navigating upcoming regulatory changes.

Target Margin Range Strategy

The IT services major is working toward achieving its target operating margin range of 26% to 28%. This margin band represents the company's strategic focus on maintaining profitability while investing in growth initiatives and operational capabilities.

Labor Code Impact Assessment

Tata Consultancy Services has identified potential margin pressures from new labor codes that are expected to take effect. The company anticipates these regulatory changes will impact its operating margins by 10 to 15 basis points starting from the fourth quarter.

Strategic Positioning

Despite the anticipated regulatory headwinds, the company remains committed to its margin optimization objectives. The management's focus on achieving the 26% to 28% margin range demonstrates confidence in its ability to manage operational efficiency while adapting to changing regulatory requirements.

The company's proactive approach to addressing these challenges reflects its commitment to maintaining strong financial performance while ensuring compliance with evolving labor regulations in the Indian market.