Tata Earnings: Firm Closes out a Solid Year Despite Client Spending on IT Services Remaining Muted

We are raising our fair value estimate for wide-moat Tata Consulting Services to INR 3,050 from INR 2,960 after the firm closed out fiscal 2024 with strong financial results. While customers continue to tighten their fiscal belts during the ongoing period of macrouncertainty, we remain impressed by Tata’s ability to navigate the current macroeconomic environment. Despite our fair value estimate increase and our continued optimism about Tata’s long-term opportunity as a leader in IT services, we view the firm’s shares as overvalued.