IT stocks drop up to 1.5% ahead of TCS Q1 results tomorrow

IT stocks: Analysts have suggested that the IT sector may see a soft earnings season, amid global uncertainties.

The shares of IT companies declined in trade on July 9 as investors actively awaited the release of the first set to Q1 FY26 results from the pack. The fall in the share prices pushed the Nifty IT index down nearly half a percent to hover around 38,801 in the morning.

(TCS) is scheduled to release its results for the first quarter of the ongoing financial year 2025-2026 tomorrow (July 10), effectively opening the earnings season for the IT pack.

What to expect from TCS Q1 results?

Analysts have suggested that the IT sector may see a soft earnings season, amid global uncertainties. Equirius Capital expects TCS’ US$ revenue to dip sequentially by 0.4 percent in CC terms. It noted that tepid growth will largely be driven by expected  ramp down in BSNL deal and some softness in sales growth in international markets. The firm expects EBIT margins to improve marginally as soft demand will likely result into lower operating. “Equirus expects material dip in TCV QoQ given seasonal softness,” it added.

Axis Securities expects TCS revenue to fall 0.3 percent sequentially in Q1, driven by the impact from BSNL deal. “EBIT margin to remain flattish by 60 bps during the quarter,” it said.

Ashika Institutional Equity Research expects TCS to report a sequential decline of 0.5 percent in USD revenue, amid the likely revenue impact of the BSNL deal ramp down.

What to watch out for in TCS Q1 results?

The key things to watch out for in TCS quarterly show include demand outlook in BFSI, retail, communication, hi-tech and other key segments, as well as any impact of volatile macro environment and tariff issues on demand. The firm’s deal pipeline, outlook on CY25E/FY26E IT budgets, any further update on growth strategies as well as possible wage hike and new deal with BSNL will be in focus

IT stocks in red

HCL Tech shares were the top loser on the index, dropping over 1 percent to trade at Rs 1,688 apiece. LTI Mindtree,  Wipro and Persistent Systems shares fell around 0.7 percent each.

Heavyweights Infosys, Tech Mahindra and TCS shares were trading in the red with marginal losses.

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