IT stocks under pressure ahead of TCS Q1 results; Nifty IT index down 1%

Shares of Indian information technology (IT) companies came under selling pressure on Thursday, mirroring weakness in the broader market, as investors turned cautious ahead of Tata Consultancy Services (TCS) June quarter earnings. The country’s largest software exporter is set to announce its Q1 FY26 results post-market hours today.

Ahead of the results, TCS shares fell as much as 0.8% to ₹3,356.35 on the BSE after a flat opening. At the time of reporting, the stock was trading at ₹3,371, down 0.4%, with a market capitalisation of ₹12.19 lakh crore.

The Tata group stock hit its 52-week high of ₹4,585.90 on September 2, 2024, and a 52-week low of ₹3,060.25 on April 7, 2025. Over the past year, the bluechip IT stock has delivered a negative return of 14%, with a decline of 18% in the last six months and nearly 3% in the past month.

Meanwhile, the Nifty IT index was down over 1%, with key constituents like Infosys , HCL Tech , Tech Mahindra , Wipro , and LTIMindtree trading in the red, falling up to 2%. Other IT stocks such as Mphasis, Persistent Systems, Coforge (formerly NIIT Technologies), and Oracle Financial Services Software also remained under pressure.

In the broader market, the BSE Sensex and NSE Nifty50 were both down 0.4%, weighed by lingering concerns over the U.S.-India trade deal. On a brighter note, U.S. President Donald Trump last night signaled that the U.S. is close to finalising a trade agreement with India, which could lend support to sentiment.

Analysts forecast muted revenue and profit growth for TCS Q1

Brokerage firms including Kotak Securities, ICICI Securities, and Motilal Oswal expect TCS to report a sequential revenue decline in constant currency, ranging from 0.4% to 3.4%, with deal wins likely to remain flat. Analysts have highlighted key headwinds such as uncertainty surrounding U.S. tariff impacts, deferred project ramp-ups, and a slowdown in the BSNL deal. However, continued momentum in the banking and financial services (BFSI) segment could offer some relief.

Among large-cap IT companies, TCS will be followed by HCLTech, scheduled to announce its earnings on July 14, and Tech Mahindra along with L&T Technology Services on July 16. LTIMindtree and Infosys are set to release their results on July 17 and July 23, respectively.

Last month, Accenture delivered stellar earnings in the third quarter of the current fiscal, despite global headwinds, which is a positive for Indian IT companies, said analysts.

For the third quarter ended May 31, 2025, Accenture reported revenue of $17.7 billion, up 7% YoY in constant currency (CC) terms, at the upper end of the guided range of 3% to 7%. Managed services revenue grew 9% YoY CC, while consulting services grew 6% YoY CC. New bookings were soft at $19.7 billion, down 7% YoY, including 30 clients with quarterly bookings over $100 million.

Analyst at PL Capital opined that the growth was driven by managed services, attributed to Federal Services, a positive read through for Indian IT companies. However, revenue guidance for Q4 ($1,717.6 billion) implies softness on account of caution among enterprise clients along with Federal mandates to prioritise spending.

“For the Indian counterpart, the slowdown in outsourcing bookings might further intensify conversion challenges on selective pockets, especially the tariff-induced verticals, while we expect BFS should continue its growth momentum in the subsequent quarters,” the brokerage said.

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