Q4 preview: TCS eyes modest growth ahead of competitors, amid stable demand trends

On the deal front, TCS is expected to sustain strong momentum, with total contract value (TCV) pegged at around $8–10 billion for the quarter, broadly in line with recent run-rates.

Written by Urvi Malvania

Updated: April 9, 2026 06:33 IST

TCS Q4 preview: Stable margins and strong deal pipeline likely, though slower deal conversion and weak retail demand may weigh on growth outlook.

Tata Consultancy Services is expected to post 0.8% to 1.5% sequential constant currency (CC) revenue growth in the March quarter, analysts said, driven by resilience in the BFSI vertical, and ramp-up in some previously signed deals.

The performance positions TCS ahead of peers Infosys and HCL Technologies, both of which are expected to see seasonal declines, while Wipro’s growth is expected to be partly supported by inorganic contributions.

TCS is set to declare its fiscal fourth quarter and full fiscal results on april 9.

“We expect 1.4% (1% organic) QoQ CC growth for TCS in Q4FY26, led by healthy revenue growth momentum in the BFSI and technology verticals, revenue growth improvement in telecom, and a 0.4% contribution from the 2.5-month consolidation of the Coastal Cloud acquisition,” analysts from ICICI Securities said.

What do analysts say?

Analysts added that demand for the IT major is expected to be soft in retail and auto, and stable in manufacturing (excluding auto) and energy, resources and utilities and client budgets are stable.

Margins are expected to remain largely stable. Estimates suggest EBIT margins will hold around the 25% level sequentially, with gains from rupee depreciation offset by continued investments in sales, marketing and artificial intelligence capabilities.

“We expect the EBIT margin to be flat QoQ, as the company is likely to invest benefits from rupee depreciation into sales, marketing and AI capability building. We expect employee restructuring charges (reported below EBIT) in Q4FY26E to be less than those incurred in Q3FY26 (Rs 2.5 billion),” analysts from ICICI Securities added.

On the deal front

On the deal front, TCS is expected to sustain strong momentum, with total contract value (TCV) pegged at around $8–10 billion for the quarter, broadly in line with recent run-rates.

“Deal pipeline should remain healthy; comments on demand, tech budgets, AI data centres, BFSI and deal wins will be key,” analysts from Motilal Oswal said.

Deal pipelines are expected to remain supported by stable client budgets and demand for cost optimisation and vendor consolidation. However, analysts flagged slower conversion of deal wins into revenue, with implementation timelines stretching and pricing increasingly linked to productivity gains from AI.

Despite the relative strength in quarterly execution, TCS is expected to report flat to negative CC revenue growth on an annual basis, trailing peers such as Infosys and HCLTech, which are likely to post modest expansion. Growth is expected to recover in FY27 to around the 4% range, broadly in line with the sector.

The outlook for FY27 is expected to remain tied to macro visibility. While client budgets have held steady so far, analysts flag risks from geopolitical tensions and evolving AI-led pricing dynamics, which could delay decision-making and extend deal conversion cycles. While deal pipelines remain healthy, analysts flagged slower conversion of order wins into revenue alongside reliance on currency tailwinds to support near-term growth, they added.