TCS shares settled at 13x FY28 price‑to‑earnings after a steep pullback, according to Nepean Capital co‑founder Gautam Trivedi. The valuation sits below the 2024 consensus of 15x, suggesting room for upside as the company’s AI‑driven revenue stream grows.
Oil prices have climbed to an average of $20 a barrel, a dramatic rise from $3 a year ago, Trivedi said. Shipping costs, which are tightly coupled to crude, have mirrored the surge, adding pressure on margin‑sensitive sectors across India.
Despite the headwinds, Trivedi remains bullish on small‑cap exposure. He cites ASM Technologies, Aeroflex and TD Power as “structural winners” in power infrastructure, data‑center expansion and manufacturing, respectively, all of which benefit from long‑term capital‑expenditure trends.
On the upside, TCS has seen its AI‑related revenue contribution climb, and the company’s data‑center investments are expected to bolster FY28 earnings. Trivedi highlighted that the stock now trades at 13x FY28 P/E, a discount to the sector average of 18x.
Going forward, Nepean Capital flags a decrease in crude oil prices as the primary catalyst for a sustained market rebound. The firm also supports lifting the capital‑gains tax on foreign portfolio investors to enhance India’s appeal, while awaiting the next earnings season and potential guidance from leading corporates.