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Shares of TCS have extended their losses in today’s session, currently trading 3.3% lower to hit an intraday low of ₹3,270.

The stock is now just 6% away from its 52-week low of ₹3,056.

– Retain neutral, Target Cut To ₹3,780 From ₹3,820

– Growth Visibility For FY26 Is Still Hazy

– Constant Currency Lower Than The Consensus Estimate

– Co Continues To Expect FY26 To Be Better Than FY25 For Major Markets

= Significant Margin Improvement In FY26 Is Unlikely

– Cut FY26-28 EPS Estimates By 1-2%

– Will calibrate hiring based on the situation

– Primary demand is cost take out and vendor consolidation deals

– Discretionary demand is under pressure

– Margins impacted as we invested in capacity anticipating growth but towards the end there was some demand contraction

– Margins boosted by BSNL rampdown and currency benefit

– BSNL deal is not included in the TCV this qtr since it’s a purchase order

– No made any decision on the wage hike front

– Guiding beacon of 26-28% on margins stays

Most analysts who have coverage on TCS have a “buy” rating on the stock.

34 out of the 50 stocks who have coverage have a “buy” rating.

12 analysts have a “hold” rating, while four others have a “sell” recommendation.

– AI Is Not Deflationary In Terms Of Pricing

– Our Business Philosophy Has Always Been That Of Profitable Growth

– We Need To Drive Growth While Retaining Margin

– We Added More Headcount At The Beginning Of The Quarter, Expect Further Growth

– Confident That International Market Rev Growth Will Be Better In FY26 Vs FY25

Shares of TCS are down to the lows of the day, Currently trading 2.2% lower at ₹3,309.

The stock had made an intraday low of ₹3,297.

– Maintain Buy, Target Cut To ₹3,950 From `₹4,050

– Stock Price Has Underperformed Its Large Indian Peers Over Last Five Years

– Stock Underperformance On De-rating As Revenue Conversion Is Slow

– Believe Market Will Look At TCS Growth Ex-BSNL

– It Can Still Deliver Industry Average Growth In FY26

– Q1 Revenue Miss Largely Due To BSNL Deal Ramp-down

– Current Valuations Give Comfort & See Limited Downside

– TCS May Perform Better Than HCLTech In The Next 12-18 Months

– Think TCS Has A Lot Of Buffer Capacity Which They Haven’t Used

– Maintain buy rating

– Price target of ₹3,850, implies potential upside of 14%

– No growth kicker yet, but margin scope remains intact

– Model revenue of new BSNL order to reflect only in Q3

– Growth continues to remain elusive

– Expect 3% US Dollar revenue CAGR over FY25-27

– Valuation are undemanding

Other IT stocks have also declined in response to the TCS results which were reported after market hours on Thursday.

Infosys shares are down up to 2.5% in earl trading, while those of Wipro, LTIMindtree, HCLTech are down between 1.5% to 2%.

Shares of TCS have opened 2% lower in early trading on Friday, in response to the first quarter earnings miss.

The stock has taken the other IT stocks lower along with it, with the Nifty IT index declining over 2%.

– International market revenue growth (-0.5%) missed our own estimates by 100 bps

– Some clients ‘de-prioritized’ or postponed their programmes

– Was expecting the global uncertainty to be short-lived, but its continuing

– AI growth in Q1 has come from industry specific solution, modernize technology estate and projects at scale

– Didn’t see many deal cancellations but saw delays in Q1

– “too early to call” if Q2 will be impacted by macro uncertainty

– Revenue drop included 2.8% impact due to ramp down of BSNL contract and 0.5% drop in international market

– Maintains buy rating

– Price target cut to ₹3,950 from ₹4,050

– Given the lack of clarity around trade deals, clients continue to remain cautious

– Wage hikes continue to be delayed at a later time

– Current valuations give comfort and we see limited downside

The TCS earnings as such is a no event. However, there are two silver linings – one they have added headcount which is up by 5,000 on a quarter on quarter basis with an increased attrition. So, that is a positive sign, it means that they are optimistic about the demand environment. But also remember 5,000 is on a base of 6,38,000. So, it is nothing very big. At the same time the miss in the revenue is quite sharp. So, I would say this is a little poor number, although TCV is in line with expectation, and some head count is the only silver lining. Margin, I am not very excited, because it is only 30 bps increase, and that too, when you are not giving wage hike. Also, there is also no impact of BSNL this quarter. So, I would read these results as no event to slightly negative.

– Retain Neutral rating

– Price target of ₹3,650

– Begins FY26 on a weak note

– Negative operating leverage from unexpected demand shock drove ex-forex margins down by 10 bps, despite currency tailwind and falling hardware costs.

– Expect FY26 revenue to decline for overall business and stay fat in the international market on a constant currency basis

– Maintain “Hold” rating

– Price target at ₹3,665

– Q1 was a miss on topline led mainly by BSNL, but also with a miss on the international business

– Of more concern and unusually, TCS seems to be struggling on profitability as well

– Demand commentary slightly weaker than expected

– Not made any decisions on wage hike for FY26E yet.

– Services like AI, Data and interactive, movement to cloud, app modernization have grown well this quarter.

– Strong demand for data and AI. Customers are looking to advance from pilots to scaled GenAI deployments.

– There’s a lot of pent-up demand and once there is clarity on macros, discretionary spending will come back.

– Retail neutral rating as growth visibility for FY26 remains hazy

– Management though, continues to maintain that FY26 will be better than FY25 for major markets

– Significant margin improvement in FY26 is unlikely

– Cut FY26-28 EPS estimates by 1% to 2% to factor in revenue and margin changes

– Cut price target to ₹3,780 from ₹3,820

– Trend of delay in decision making by clients and deferment of deals continued in Q1 owing to the uncertain environment.

– Clients continue to focus on ROI of new investments, which has led to delays and pause in deals.

– Few deals which were about to start in Q1 have seen delays.

– With all trade discussions coming to a close and new Bill gaining Presidential sanction, things will become clearer by end of July.

Deal wins remained within the company’s guided band, but narrowed in comparison to the March quarter. US Dollar revenue declined compared to expectations of growth, while net profit was aided by a higher other income component.

EBIT margins were marginally higher than expectations.

In response to TCS’ results, the US-listed shares of its peers, Infosys and Wipro, ended with steep cuts on Thursday.

The Infosys ADR fell 4%, while that of Wipro, ended with cuts of 5%.

TCS does not have ADRs listed in the US.

A key highlight of the numbers was the 3.3% sequential drop in constant currency revenue, which was much higher than the 1.4% projected in the CNBC-TV18 poll of analysts.

Good Morning!

We are back up and early to bring to you all the live updates of TCS’ shares reacting to its quarterly results.

The numbers were reported after market hours on Thursday.

Watch this space for all the live updates.

– Constant currency revenue growth declines 3.3% sequentially compared to estimates of a 1.4% drop

– International market declines 0.5% quarter-on-quarter compared to 0.6% drop sequentially

– EBIT margin at 24.5% from 24.2% last quarter and higher than estimates

– TCV at $9.4 billion compared to $12.2 billion last quarter

– Attrition rate rises for fourth straight quarter to 13.8% from 13.3% sequentially

– US Dollar revenue declines 0.6% compared to expectations of 0.6% growth

TCS Chief Human Resources Officer Milind Lakkad said salary hikes will depend on business momentum and macro recovery.

“If the macroeconomic environment improves, and as a result of business improves, we will definitely give the best possible hikes we normally give,” he said.

Sushovon Nayak, IT Research Analyst at Anand Rathi Institutional Equities, said the constant currency revenue decline of 3.1–3.2% was sharper than estimated 1.9%. “The top line was steeper than expected, but I would not advise to cut positions.”

He flagged the 24.5% margin and $9.4 billion TCV as positives and expects growth to pick up in H2 FY26.

TCS Chief Operating Officer Aarthi Subramanian said GenAI is increasingly being used to modernise legacy systems, with a clear shift towards domain-specific applications. “We see customers investing in industry-specific solutions. Gen AI is becoming the tool to understand the legacy core,” she noted.

She added that due to the evolving nature of AI opportunities, enterprises are now focused on targeted use cases. “Customers are looking for domain-specific use cases, and leveraging AI to modernise legacy applications.”

Subramanian also said that Agentic AI, despite being only 6–8 months old, is already influencing conversations with clients. “We are working on industry value chain solutions with Agentic AI in the BFSI space… we will see more of this across industries.”

She highlighted that the Business Process Services (BPS) vertical is another area showing promise. “Agentic AI is giving exciting opportunities,” she added.

“We expect to hire as we had planned. The kind of jobs they will do is different,” says CHRO Milind Lakkad.NewsLive TVMarketPopular CategoriesCalculatorsTrending NowLet's Connect with CNBCTV 18Network 18 Group :©TV18 Broadcast Limited. All rights reserved.