Mumbai: Shares of Tata Consultancy Services (TCS) declined nearly 2 per cent on Thursday ahead of the company’s first-quarter earnings announcement, as investors remained cautious over expectations of muted growth and continued weakness in global technology spending.

The stock opened 0.16 per cent lower at ₹2,055 before falling further to ₹2,018, down 1.97 per cent during early trade.

Analysts remain cautious ahead of earnings

According to Bloomberg data, TCS currently has 32 ‘buy’, 11 ‘hold’ and six ‘sell’ recommendations, with an average target price of ₹2,655.47, implying a potential upside of around 29 per cent.

However, market experts believe investors should remain cautious despite the recent decline in the stock price.

Harshal Dasani, Business Head at INVAsset PMS, said the fall in TCS shares does not automatically make it a buying opportunity, as the company continues to face weak demand conversion and limited recovery in discretionary technology spending.

He noted that earnings visibility remains the key concern, adding that investors are waiting for clearer signs of a sustained business recovery.

What to watch in Q1 results

Analysts expect the June quarter to remain challenging for India’s largest IT services exporter.

Bloomberg estimates project:

  • Revenue to rise 1 per cent quarter-on-quarter to ₹71,743 crore.
  • Operating profit (EBIT) to decline 3 per cent to ₹17,284 crore.
  • Net profit to fall 2 per cent to ₹13,485 crore.
  • EBIT margin to ease to 24.19 per cent from 25.27 per cent.
  • Employee attrition to increase to 11.5 per cent.

Investors will closely watch management commentary on deal wins, demand from the banking and financial services (BFSI) sector, the US market outlook, margin trends and whether artificial intelligence is beginning to contribute to revenue growth rather than only improving operational efficiency.

Sector outlook remains challenging

The broader Indian IT sector is also expected to report subdued quarterly earnings, as clients continue to delay discretionary spending amid economic uncertainty.

Analysts believe a strong earnings report could stabilise TCS shares, but a sustained rally will depend on evidence that revenue growth has begun to recover.