TCS Q1 FY26 Results: All Eyes on Earnings, Dividend, and Deal Outlook Amid Global Headwinds
Mumbai, July 10 – Shares of India’s largest IT services company, Tata Consultancy Services (TCS), remained largely flat in morning trade on Wednesday, ahead of the company’s much-anticipated Q1 FY26 results scheduled for release later in the day. The stock opened with marginal gains and was trading at Rs 3,384 apiece, up just 0.02 percent as of 10:30 am.
The earnings announcement is expected to kick off the financial results season for the Indian IT sector, which is currently facing a slew of macroeconomic headwinds, including global uncertainties and tepid demand from key international markets.
Dividend on the Radar: TCS Sets Record Date for Interim Payout
Apart from financial performance, TCS shareholders are keenly watching the possibility of a dividend announcement. The company has already notified exchanges that its Board of Directors will meet on July 10 to approve the quarterly results as well as consider and approve an interim dividend.
TCS has fixed July 16, 2025, as the record date for determining eligible shareholders for the dividend.
“The interim dividend, if declared, shall be paid to the equity shareholders whose names appear on the Register of Members or in the records of Depositories as beneficial owners as on Wednesday, July 16, 2025,” the company said in its exchange filing.
What Analysts Expect from TCS Q1 FY26 Results
Most analysts anticipate a muted quarter for TCS, as well as for the broader IT industry. Macro volatility, U.S. tariff concerns, and moderation in international demand are cited as key reasons behind the conservative estimates.
Impact of BSNL Deal Ramp-Down
TCS is likely to feel the revenue pinch from the planned ramp-down in the BSNL deal, a government contract that had previously contributed significantly to the company’s topline.
- ICICI Securities estimates a 3.4 percent decline in constant currency revenue, largely due to a $300 million drop from the BSNL contract.
- Axis Securities expects a 0.3 percent sequential fall in revenue, also attributing it to BSNL and suggesting flat EBIT margins with a 60 basis point deviation.
- Equirus Capital forecasts a 0.4 percent dip in U.S. revenue in constant currency terms, adding that TCV (Total Contract Value) may decline quarter-on-quarter due to seasonal softness.
- Ashika Institutional Equity Research also projects a 0.5 percent fall in USD revenue.
Despite weak top-line growth, analysts predict marginal improvement in EBIT margins as softer demand may reduce operating costs.
Key Focus Areas for Investors and Analysts
As TCS reports its financials for the April–June quarter of FY26, market watchers are expected to track several core metrics beyond revenue and margins:
- Demand Outlook across BFSI, retail, telecom, hi-tech, and manufacturing verticals.
- Deal Pipeline and TCV Trends, especially in light of the seasonal decline.
- Commentary on CY25E and FY26E IT Budgets from global clients.
- Updates on Wage Hikes and headcount additions or reductions.
- Details of New or Updated BSNL Contracts or other large public sector engagements.
- Impact of Geopolitical Uncertainty and U.S. Tariffs on North America business.
Given the cautious macroeconomic backdrop, investors are expected to react more to forward-looking commentary than to raw numbers alone.
TCS Share Performance: Under Pressure in 2025
TCS stock has had a challenging run in 2025 so far, falling around 18 percent year-to-date. The stock is also down over 21 percent in the past six months. In the last 30 days alone, it has declined by over 2 percent, reflecting investor anxiety around global tech demand and tariff policy volatility.
The decline has largely been attributed to uncertainties around U.S. President Donald Trump's shifting tariff stances, which have unsettled global IT investments. Analysts fear that increased consumer tariffs could raise U.S. inflation, triggering cuts in corporate tech spending, especially from BFSI and retail clients.
Despite the fall, TCS remains a heavyweight constituent of benchmark indices Sensex and Nifty 50, and commands a P/E ratio above 25, indicating that investors still have long-term confidence in its business model.
The Trending People Final Thoughts
As the Indian IT sector braces for a modestly challenging earnings season, all eyes are on TCS’s Q1 FY26 results to set the tone. While short-term revenues may feel the heat from the BSNL ramp-down and global demand headwinds, the real takeaway will lie in the company’s strategic roadmap, client budget outlook, and resilience in core verticals like BFSI and hi-tech.
With its legacy of dividend payouts, large client base, and innovation-driven strategy, TCS continues to be a bellwether—not just for Indian IT, but for global sentiment in the outsourcing and digital transformation industry.