Tata Consultancy Services (TCS) is set to announce its results for the first quarter of the current fiscal year 2026 (Q1FY26) today, July 10. According to its regulatory filing, the IT major is likely to release its Q1 numbers after the market hours, followed by a press conference by the management at 5:30 pm. The company will also have an investor and analyst call after that at 7:00 pm IST to discuss its Q1 performance.
Here are 5 key things to watch out for amid a slowdown in demand, uncertainties driven by global trade tensions, and the artificial intelligence boom.
1. TCS Q1 preview: Modest profit growth expected in Q1
Analysts expect TCS to post a modest year-on-year net profit growth of 0.4 to 3.1 per cent, aided by stable demand and effective cost management. The company’s board will also consider declaring an interim dividend, with July 16 set as the record date.
Investors will closely watch the management’s commentary on the BFSI segment and the North American market, both of which have been under stress due to muted discretionary spending. Any signs of recovery in these key areas could act as a positive trigger for the stock.
2.TCS Q1 preview: Impact of BSNL deal rampdown
TCS is expected to report a sequential decline in both revenue and profit due to the ramp-down of key deals, especially the BSNL project. Analysts say revenue growth will be modest in constant currency terms, with forex gains cushioning reported numbers.
Nuvama estimates a 1 per cent QoQ decline in constant currency revenue, citing weak retail and manufacturing, while BFSI remains strong. Kotak sees a 0.4 per cent dip, entirely driven by the BSNL deal, and expects just 0.3 per cent growth in developed markets.
3. TCS Q1 preview: EBIT margins expected to be steady with minor uptick
EBIT margins are expected to remain stable or see a slight rise in Q1, supported by cost moderation from the near completion of the BSNL project and wage hike deferrals.
Elara Capital expects a 20 bps QoQ margin expansion, while Kotak Institutional Equities sees margins staying flat despite currency tailwinds. Deal wins are projected at $8–9 billion, but concerns remain over slow international growth due to client ramp-downs.
4. TCS Q1 preview: Hiring and wage hikes
TCS surprised in the previous quarter by deferring the wage hike cycle, which usually began on April 1, underscoring the macro-economic challenges the industry faces.
During the quarter, the IT services giant made another HR policy change, making it mandatory for all associates to be billed for at least 225 days annually, which reduces bench timelines for employees.
Commentary on these, hiring plans for both freshers and laterals, and the impact of AI on jobs will be closely watched. As of now, TCS plans to hire more than 42,000 freshers this fiscal, as per a report by Moneycontrol.
5. TCS Q1 preview: Deal wins, and AI focus
Investor attention will be on TCS’s margin outlook, especially in light of wage inflation and forex effects. Also, the market will closely track new deal wins, particularly for Generative AI and cloud services, which are seen as key future growth levers.
For the fourth quarter of FY25, TCS had reported a net profit of Rs 12,224 crore, posting a drop of 1.6 per cent year-on-year, compared to Rs 12,434 crore in Q4 FY24. It had posted revenue from operations at Rs 64,479 crore, up 5.29 per cent as against Rs 61,237 crore during the same period of the previous financial year. The company’s EBIT stood at Rs 15,601 crore.