The Nifty IT index was trading 2.1% lower, dragged by a broad-based sell-off across frontline and mid-tier technology stocks. TCS shares fell 2.5% to Rs 3,297 on the NSE, even as the company reported a 6% year-on-year rise in net profit to Rs 12,760 crore for the June quarter, beating consensus estimates of Rs 12,205 crore. Revenue from operations rose 1.3% to Rs 63,437 crore, though constant currency revenue contracted 3.1% YoY — a key concern for analysts and investors.
Infosys shares slid 3.3% to Rs 1,563, while Wipro declined 2.5% to Rs 258.45. HCL Technologies and Tech Mahindra were down 1.7% and 1.4%, respectively. Shares of other major IT players such as Coforge, Mphasis, and Persistent Systems fell between 0.5% and 1.5%.TCS Q1 misses on revenue quality TCS’s weak constant currency revenue and muted commentary on near-term demand weighed heavily on sentiment. The 3.1% YoY fall in constant currency terms was partly attributed to a “sharp ramp-down in BSNL contracts”, according to brokerage Nuvama, which maintained a ‘buy’ rating on the stock but lowered its target price to Rs 3,950 from Rs 4,050. The brokerage noted that despite revenue softness, “PAT stood at Rs 12,700 crore, beating estimates, and deal wins hit USD 9.4 billion, up 13.3% YoY.”
TCS CEO K. Krithivasan acknowledged the subdued environment, stating that “continued global macroeconomic and geopolitical uncertainties caused a demand contraction”, though he added, “we saw robust deal closures during this quarter.” He also noted that TCS is working closely with clients “through cost optimization, vendor consolidation, and AI-led business transformation.”
The company highlighted a “robust order book and operational resilience”, with a Total Contract Value (TCV) of $9.4 billion for the quarter.
Brokerages lower targets on TCS Antique retained its ‘buy’ rating but revised its target price to Rs 3,725, down 3% from its earlier estimate, citing “near-term pressures.” It also cut EPS estimates for FY26 and FY27 by 2–3%, but argued that “inexpensive valuation provides a good entry point for long-term investors.”
Motilal Oswal also maintained a ‘buy’ rating with a price target of Rs 3,850. It noted that “most of the Q1 revenue decline was led by BSNL, but international business also slipped 0.5% amid macro uncertainties.” The brokerage said execution of BSNL’s pending Rs 2,900 crore order “remains unclear.” While margins improved 30 bps QoQ, it cautioned that “revenue conversion remains a challenge as productivity gains weigh on topline growth.”
Nuvama similarly expects “international growth should pick up as macro headwinds ease”, but trimmed FY26/FY27 EPS estimates by 1.9–3%.
Despite the strong deal wins, the Q1 results and subdued management commentary offered little reassurance to investors hoping for a near-term demand revival. With export-driven IT firms still grappling with global economic and geopolitical headwinds, analysts expect caution to prevail in the short term.
As TCS kicks off the earnings season for India’s top tech exporters, the broader IT sector may remain under pressure if other large-cap players mirror these muted trends.
Also read | TCS shares tumble 2% after Q1 show fails to cheer D-Street. Should you buy, sell, or hold?
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