Ahead of Tata Consultancy Services (TCS) Q1FY26 results, market analysts are advising caution, expecting a muted performance across large-cap IT stocks. The June quarter is likely to show year-on-year revenue pressure, with Infosys expected to be an exception among tier-1 IT players.
June quarter to remain soft for IT majors
According to sector experts, the June 2025 quarter could reflect challenges such as project delays, sluggish client spending, and ongoing macro uncertainty — particularly from the U.S. and European markets. Most tier-1 IT companies, including TCS, HCLTech, Wipro, and Tech Mahindra, are forecast to report sequential revenue decline.
September quarter outlook holds key
Despite the expected Q1 softness, analysts remain optimistic about the second half of FY26, especially the September quarter (Q2FY26). A revival in enterprise tech spending, along with deal ramp-ups and improved visibility, is expected to support revenue growth in the coming months.
3 key triggers to watch in TCS results:
Experts suggest focusing on these three factors when interpreting the results:
Q2FY26 guidance – Revenue outlook and margin commentary for the upcoming quarter
Management commentary – Deal pipeline strength, hiring trends, and demand environment
Clarity on large trade deals – Update on mega contracts and spending patterns from BFSI and retail clients
Midcap IT companies could outperform
In contrast to their larger peers, midcap IT firms are expected to deliver stronger earnings growth, driven by specialized offerings, better pricing power, and lower exposure to large discretionary deals. Names like Coforge, Persistent Systems, and LTIMindtree are being closely tracked by analysts.
Don’t rush to sell at lower levels, say experts
With valuations now more reasonable, analysts urge investors not to panic-sell based on Q1 numbers alone. Instead, a wait-and-watch approach is advised, especially if management commentary indicates strength in the second half of the fiscal year.
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