The Indian stock market is closely watching Tata Consultancy Services (TCS) as the tech giant prepares to announce its financial results for the first quarter (Q1) of the fiscal year 2025-26 today.
Investors and market analysts alike are eagerly anticipating whether TCS will meet market expectations amid a challenging economic landscape.
Year-to-date in 2025 so far, the Tata group company has shed about 18% of its value, reflecting broader concerns in the IT sector and cautious investor sentiment.
TCS Share Price in 2025 so far…
Revenue Growth: Slow but Steady
Market experts predict moderate revenue growth for TCS in Q1, reflecting cautious spending by global clients amidst ongoing macroeconomic uncertainties.
According to estimates, TCS’s revenue growth is expected to range between 1.2% and 1.8% quarter-on-quarter (QoQ) in constant currency terms.
However, year-on-year (YoY) revenue growth projections hover around 6% to 8%, indicating resilience despite global headwinds.
Source: CNBC TV18
Margin Pressure & Profit Expectations
Margins will be another crucial area investors will scrutinize closely. Market watchers expect TCS’s EBIT margin to remain steady around 24-25%, supported by strong operational efficiencies.
However, wage hikes, currency fluctuations, and elevated hiring costs might slightly dent margins compared to previous quarters. The net profit for Q1 is anticipated to remain largely flat or marginally higher compared to Q4 FY25, wherein the IT services major had reported a nearly 2% drop in consolidated net profit, amounting to Rs 12,224 crore.
Source: NDTV Profit, Money Control
Key Deals and Order Pipeline
One of the major highlights that investors are looking forward to is the company’s performance on new deals and the overall order pipeline. In the past quarters, TCS showcased strong order bookings despite global economic volatility.
Experts suggest that if TCS reports robust deal wins similar to the previous quarter’s $10 billion-plus range, it could bolster investor confidence significantly.
Source: India Today
Hiring Trends and Attrition Rate
Another area under the spotlight will be TCS’s hiring and attrition rate figures. With the global tech industry still recovering from layoffs and job market volatility, TCS’s hiring trends will offer insights into management confidence and market demand.
Attrition rates, previously hovering between 15% and 20%, are expected to stabilize or decline slightly due to economic uncertainties influencing employee decisions.
Dividend Payout and FY26 Outlook
Investors will be watching for clarity on dividend payouts, a key attraction of TCS stock. Historically, TCS maintains a consistent dividend policy, which reassures investors during market volatility.
Additionally, the management’s commentary on the FY26 outlook will be critical. Investors will look for guidance on how TCS plans to navigate persistent economic headwinds and sector-specific challenges, such as slowing IT spends in major markets like North America and Europe.
Source: Economic Times
What Should Investors Do?
For investors, today’s results will offer vital clues about TCS’s ability to sustain performance amid challenging market conditions.
While short-term pressures like wage hikes, margin fluctuations, and cautious client spending might create temporary volatility, TCS’s strong fundamentals and consistent dividend payouts remain attractive for long-term investors.
Experts suggest investors remain patient and observe how TCS handles deal wins and margin pressures this quarter. For cautious investors, it might be prudent to wait and evaluate the management’s commentary before making significant investment decisions.
Today’s earnings announcement is significant, not just for TCS but also for understanding broader market trends impacting the IT industry. While investors remain cautiously optimistic, the coming hours will offer clearer insights into where TCS stands and how prepared it is to navigate potential headwinds in the near future.
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Yash Vora is a financial writer with the Informed InvestoRR team at Equentis. He has followed the stock markets right from his early college days. So, Yash has a keen eye for the big market movers. His clear and crisp writeups offer sharp insights on market moving stocks, fund flows, economic data and IPOs. When not looking at stocks, Yash loves a game of table tennis or chess.
