Tata Consultancy Services (TCS) shares have experienced a significant downturn in the calendar year 2026, dropping over 31% year-to-date. The IT major's stock closed at Rs 2,220.50 on Tuesday, reflecting ongoing market pressures. However, some market experts maintain a positive long-term outlook for the company, citing its strategic focus on artificial intelligence (AI) infrastructure and data centers.
TCS Financial Performance and Market Reaction
In the first quarter of fiscal year 2027 (Q1 FY27), TCS reported a consolidated net profit of Rs 13,349 crore, marking a 4.62% increase year-on-year from Rs 12,760 crore in the same period last year. Revenue from operations also saw robust growth, climbing 13.93% year-on-year to Rs 72,275 crore from Rs 63,437 crore. Despite these positive financial results, the company's stock has faced considerable pressure throughout the year.
As of June 30, 2026, TCS maintained a substantial workforce of 593,798 employees. The last twelve months (LTM) attrition rate in its IT services business stood at 13.6% during the quarter.
Strategic Shift Towards AI Infrastructure
A key factor fueling expert optimism is TCS's aggressive expansion into AI infrastructure. Reports indicate that the company has acquired two land parcels in Visakhapatnam (Vizag) and Pune. These sites are rumored to be potential locations for US-headquartered OpenAI's first data facilities in India, although TCS has not yet officially confirmed this development.
Ravi Singh, Chief Research Officer at Mastertrust, highlighted the strategic importance of these acquisitions. "The reported move to acquire land in Vizag and Pune suggests the company is preparing for the next wave of AI-led growth rather than just expanding its traditional IT business," Singh stated. He added that developing these locations into AI data centers could significantly enhance TCS's capacity to deliver large-scale AI infrastructure and meet the rising enterprise demand for generative AI solutions. This initiative aligns with TCS's broader AI strategy, aiming to build long-term capabilities.
Kranthi Bathini, Equity Strategist at WealthMills Securities, echoed this sentiment. "With an increased focus on data centers and AI, TCS is strengthening its presence in the data center segment through its collaboration with OpenAI," Bathini commented. He believes this expansion reflects a strong long-term strategic focus that could substantially bolster TCS's future growth prospects.
Long-Term Outlook Amidst Short-Term Pressures
While the strategic investments are encouraging from a long-term perspective, experts caution that they are unlikely to impact the company's short-term earnings outlook immediately. Key factors to monitor will include official announcements, the speed of project execution, and how these investments translate into new commercial opportunities and revenue streams. If successfully executed, this push into AI infrastructure could solidify TCS's position as a leading technology partner in the rapidly evolving AI ecosystem.