TCS Q1 results, dividend on Thursday, July 10; here's earnings preview

IT bellwether Tata Consultancy Services Ltd (TCS) is all set to declare its audited standalone and consolidated financial results for the quarter ended June 30, and interim dividend for FY26 on Thursday, July 10.

IT analysts tracking the Tata group firm said the demand outlook, especially for the retail and manufacturing verticals, margin levers and commentary on client feedback regarding spending, would be key to watch out for.

For the quarter, the report card is expected to be tepid, at most low single-digit growth in sales and profit, largely due to a ramp down in BSNL project and modest growth in developed market with weakness in retail & manufacturing.

Antique Stock Broking expects TCS’ revenue growth to decline 0.6 per cent in constant currency (CC) terms. In dollar terms, the Tata group firm is expected to log a 1 per cent growth QoQ, with a 160 basis points tailwind from cross-currency.

"Growth will be impacted by the tapering down of the BSNL deal. We expect the EBIT margin to remain flat QoQ at 24.2 per cent despite tailwind from currency. Deal bookings are expected to be around $9–10 billion," Antique said.

Profit for the quarter is seen growing 3.5 per cent YoY to Rs 12,454 crore on 4 per cent rise in sales at Rs 65,123 crore. Nuvama sees profit at Rs 12,214 crore, up 1.5 per cent YoY. This brokerage forecast sales at Rs 64,600 crore, up 3.2 per cent.

Nirmal Bang Institutional Equities pegged deal wins at $7–8 billion in Q1. It expects margin to drop 40 bps QoQ (down 70 bps YoY) to 23.8 per cent due to lower utilizations, higher visa costs, talent investment, and already squeezed operating leverage. Adjusted profit is seen at Rs 11,728 crore, down 3 per cent.

"We forecast a revenue decline of 0.4 per cent CC, led entirely by a decline in BSNL revenues. We forecast revenues of $157 million, down $57 million or 75 bps qoq. We forecast revenue growth of 0.3 per cent in developed markets. We expect EBIT margins to decline YoY despite the deferral of wage revision normally scheduled in April of every year. The impact on margins is due to a lack of any leverage from growth," Kotak Institutional Equities said.

Kotak said the impact of tariff uncertainty on demand across verticals, with special focus on manufacturing and retail verticals; reasons for the underperformance in growth in developed markets, outlook in financial services and healthcare verticals and any loss of share to insourcing at large clients, and reasons for weak margin performance, will be keenly watched.

Impact of GCC ramp-up on growth of companies and GCC as a growth lever, pace of adoption of enterprise GenAI adoption and its deflationary impact and levers to defend and increase margins will also be tracked keenly, Kotak said.

Centrum Broking in its Q1 preview note expects CC revenue degrowth of 2.8 per cent QoQ for TCS, led by ramp down of BSNL deal, with cross currency tailwind of around 180 basis points. It expects EBIT margin to decline 19 bps QoQ led by decline in revenues. Profit is seen at Rs 11,862 crore, down 1.5 per cent YoY.

TCS dividend

Meanwhile, TCS in a filing to stock exchanges that the interim dividend, if declared, shall be paid to the equity shareholders of the IT firm, whose names appear on the register of members of the Tata group firm or in the records of the Depositories as beneficial owners of the shares as on Wednesday, July 16, 2025, which is the record date fixed for the purpose.