Key Points:
- TCS Q2 Results FY26: Revenue likely up 3% to ₹65,300 crore amid weak global demand.
- Margins to stay flat, pressured by rising employee costs.
- Investors eye deal wins and outlook on AI, U.S. spending for sector recovery cues.
Mumbai — Tata Consultancy Services (TCS) will kick off the second-quarter earnings season today, with investors closely tracking the IT major’s performance amid persistent global headwinds. The TCS Q2 Results FY26 are expected to offer insights into the broader information technology sector, which continues to face weak demand and cautious client spending.
Shares of TCS closed 1.9% higher at ₹3,031 apiece on the National Stock Exchange on Wednesday, ahead of the results announcement. However, the stock remains down 23% on a year-to-date basis, compared with a 15% decline in the NIFTY IT index over the same period.
Analysts expect modest growth
Market consensus points to a subdued revenue performance for TCS Q2 Results FY26. According to estimates compiled by Investing.com, the company’s revenue is expected to rise 3% sequentially to ₹65,300 crore. Analysts say the uptick will likely be supported by the depreciation of the rupee, even as the demand environment remains weak.
“Revenue growth may stay modest due to slower deal wins and muted discretionary spending,” an analyst tracking the sector said. Among business verticals, banking, financial services, and insurance (BFSI), along with technology, are expected to show stable growth. Meanwhile, the life sciences, healthcare, and communications segments may drag on the overall topline.
Margins may stay under pressure
Operating margins for TCS Q2 Results FY26 are projected to remain largely flat or show slight improvement, driven by currency benefits. However, rising employee costs and limited utilization from low-margin projects could offset some gains.
“Wage hikes for junior employees and reduced billing from certain domestic projects are expected to limit margin expansion,” HSBC Research said in a note. The brokerage added that any impact from recent layoffs would likely appear in subsequent quarters rather than in Q2FY26.
Investors eye deal pipeline
Analysts and investors will focus on TCS Q2 Results FY26 large-deal momentum and management commentary for cues on demand recovery. The company’s outlook on U.S. client spending, pricing in artificial intelligence (AI)-related projects, and deal conversion rates will be key indicators for the coming quarters.
“Deal signings and the commentary on the macro environment will set the tone for the rest of the IT sector,” the analyst said.
TCS Q1FY26 performance
In the previous quarter ended June 2025, TCS reported revenue of ₹63,437 crore, up 1.6% year-on-year but down 1.6% sequentially. In constant currency terms, revenue fell 3.1% from the year-ago period. The company’s total contract value during that quarter stood at $9.4 billion, compared with $12.2 billion in the preceding quarter.
Despite muted growth, analysts believe TCS’s large and diversified client base, along with its strong balance sheet, positions it better than peers to navigate the current slowdown. However, sustained improvement in global demand and recovery in discretionary IT spending will remain critical for long-term growth.
The TCS Q2 Results FY26 are expected to provide early signals for the earnings trajectory of other major IT firms such as Infosys, Wipro, and HCLTech, which are scheduled to announce their results later this month.
