IT stocks: Market experts say that TCS’s first quarter results indicate a continuing period of struggle for IT companies, especially large IT companies
IT stocks: The Nifty IT index fell in early trade on Friday, July 11, as investors rushed to sell their holdings after India’s largest IT services company Tata Consultancy Services posted poor results for the quarter ended June 30, 2025. Around 9.30 am, the Nifty IT index was down 1.2 per cent at 37,902.65. Shares of TCS, Wipro, Infosys and LTI Mindtree contributed the most to this decline. The biggest decline was seen in large-cap IT services companies. While the performance of mid-cap companies looks comparatively better.
VK Vijayakumar, Chief Investment Strategist, Geojit Investments, said that TCS’s first quarter results indicate the continuation of difficulties for IT companies, especially large-cap IT companies. However, midcap IT companies are expected to perform well. Investors can focus on fair value stocks with earning potential.
TCS has reported that the company’s profit in the first quarter of FY 2026 has increased by 6 per cent year-on-year to Rs 12,760 crore, while in the same quarter last year it was Rs 12,040 crore. On a quarterly basis, the company’s profit grew 4.4 per cent from Rs 12,224 crore, better than market expectations. However, the company has reported that its operating revenue in the April-June quarter has increased by 1.3 per cent to Rs 63,437 crore.
Japanese brokerage firm Nomura has maintained its ‘Neutral’ call on TCS and reduced the target from Rs 3,820 per share to Rs 3,780. The brokerage says that the company’s growth prospects for FY26 still remain bleak. Apart from this, the brokerage firm has also said that TCS’s constant currency revenue was lower than expected. There is little chance of major improvement in margins this year.
HSBC has maintained its ‘Hold’ call on TCS with a target price of Rs 3,665 per share. The brokerage says that the first quarter results have shown a decline in revenue. The main reason for this has been BSNL and its international business branch. The broking house further said that the company also seems to be facing difficulties in terms of profit. Apart from this, demand estimates are also lower than expected.
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