Tata Consultancy Services shares head into the June-quarter results with weak technical momentum and low expectations on earnings growth, making the management commentary as important as the reported numbers. India’s largest IT services company is expected to report 13% year-on-year revenue growth and 4% year-on-year profit growth in Q1FY27, based on an average of estimates from six brokerages. Sequential growth, however, is likely to be almost flat, showing that demand recovery remains weak for large-cap IT companies.
The stock has already had a difficult year. Morgan Stanley said TCS has corrected 35% year-to-date, against a 9% fall in the Sensex, and has underperformed some peers such as Wipro and HCL Tech. Despite the fall, the brokerage believes the stock’s risk-reward has become less favourable compared with Infosys.
