TCS Share Price: A Look at the Next Three Years
Tata Consultancy Services (TCS) recently announced its third-quarter results for FY26. The stock showed little movement after the announcement, trading at ₹3,251 on January 13, 2026. This price marks a significant decline from ₹4,321 on the same date in 2025. Investors are now wondering where TCS shares might head over the next three years.
Key Factors Influencing TCS's Future
Several indicators will shape TCS's performance. Management commentary after the Q3 results expressed optimism. They noted an acceleration in Q3 FY26, continuing momentum from earlier quarters. Client spending showed no signs of slowing down, according to company statements.
Artificial intelligence remains a central theme for TCS. The company's AI services now generate $1.8 billion in annualized revenue. Over 217,000 associates possess advanced AI skills as of December 2025. TCS is executing a five-pillar AI strategy to transform into an AI-first enterprise.
Recent initiatives include a major AI upgrade to the TCS BaNCS platform. The new TCS BaNCS AI Compass aims to boost innovation for banks and security firms. TCS also expanded its partnership with Google Cloud, adopting the Gemini Enterprise agentic AI platform. These efforts should strengthen the company's position in the AI market.
Financial Performance and Challenges
TCS reported a drop in total contract value (TCV) during Q3 FY26. Signed deals amounted to $9.3 billion, down from around $10 billion in the previous quarter. This softening deal momentum could pressure growth expectations if it continues into Q4.
Despite this, operating margins held steady at 25.2%. The company demonstrated disciplined cost management amid wage pressures. TCS rewarded shareholders with a total dividend of ₹57 per share, comprising an interim dividend of ₹11 and a special dividend of ₹46. The record date was January 17, 2026, with payment scheduled for February 3, 2026.
Segment performance showed mixed results. The BFSI segment displayed "green shoots" with 1.6% year-on-year growth, though it dipped 0.4% sequentially. Regional markets in India saw a strong 8% quarter-on-quarter surge but remained volatile year-on-year due to high base effects from previous large projects.
Risks and Uncertainties
TCS faces several key risks that could impact its share price. Weak global IT spending, particularly in the US, might drag on discretionary tech budgets and slow new deal wins. Client project deferrals or downsizing could blunt revenue and TCV momentum.
Tariff and trade uncertainty may reduce client budgets or alter sourcing strategies, directly affecting TCS's revenue base. US policy headwinds, including visa cost increases and H-1B fee hikes, add operating complexity and could compress margins. Political shifts and immigration policy uncertainty continue creating volatility for Indian IT stocks with significant US revenue exposure.
TCS operates in 55 countries with over 600,000 employees and more than 200 delivery centers. The company delivers consulting-led services through a location-independent agile model, which provides resilience but also exposes it to global economic fluctuations.
Three-Year Outlook for TCS
Based on Q3 FY26 results and management's strategic roadmap, the next three years (2026-2029) will likely see TCS shifting from volume-led growth to value-led intelligent automation. The company could report steady growth driven by AI adoption, digital transformation demand, and its resilient business model.
Near-term headwinds from softer deal wins and macroeconomic caution may persist, but TCS's fundamentals remain strong. Investors should evaluate corporate governance, valuations, and the company's ability to navigate risks when making investment decisions.
This analysis is for informational purposes only and does not constitute stock recommendations. Always conduct thorough due diligence before investing.
