TCS Q1 results preview, interim dividend, target prices & more  

Tata Consultancy Services Ltd (TCS), India’s largest IT services exporter, will announce its June quarter (Q1 FY26) results today. Investors will closely watch deal momentum, management commentary on client demand trends, the impact of a scaled-down BSNL contract, and performance across key verticals such as BFSI, retail, and manufacturing. Expectations around an interim dividend are also high.

Modest Q1 growth likely 
Brokerage estimates suggest a subdued start to the financial year for the Tata Group IT major. Net profit for the quarter is expected to grow between 1.5 per cent and 3.5 per cent year-on-year (YoY), while revenue is seen rising up to 4 per cent YoY. Sequentially, growth is expected to remain muted, with a few brokerages forecasting a minor revenue dip in constant currency (CC) terms due to a ramp-down in the BSNL deal and weak demand in global markets.

TCS Q1 profit, sales, margin estimates
Nirmal Bang Institutional Equities expects deal wins of $7–8 billion, and sees EBIT margin dropping 40 basis points QoQ to 23.8 per cent. Net profit is estimated at Rs 11,728 crore, down 3 per cent YoY.

Axis Securities projects net profit at Rs 12,352 crore and revenue at Rs 64,301 crore, with EBIT margin at 24.8 per cent. Attention will be on client commentary in the retail and manufacturing verticals.

Equirus Securities expects revenue at Rs 65,061 crore, up 3.9 per cent YoY, and PAT at Rs 12,368 crore, a 2.7 per cent YoY increase. Revenue is likely to fall 0.4 per cent in CC terms.

Kotak Institutional Equities anticipates a 0.4 per cent decline in CC revenue, largely due to a $57 million sequential drop in BSNL revenues. Growth in key Western markets is seen as flat to marginally positive. Deferred wage hikes may offer some cushion, but Kotak expects margin pressures from weak operating leverage.

Antique Stock Broking sees CC revenue dipping 0.6 per cent, but expects a 1 per cent QoQ rise in dollar revenue due to favourable currency movements. Net profit is estimated at Rs 12,454 crore, up 3.5 per cent YoY, with revenue at Rs 65,123 crore.

Nuvama Institutional Equities is more conservative, expecting PAT at Rs 12,214 crore (up 1.5 per cent YoY) and revenue of Rs 64,600 crore (up 3.2 per cent YoY).

Centrum Broking has the most bearish view, projecting a 2.8 per cent QoQ decline in CC revenue and a 1.5 per cent YoY fall in profit to Rs 11,862 crore, despite a 180-basis-point currency tailwind.

Deal wins in seasonally soft quarter

Analysts expect deal wins to range between $7 billion and $10 billion, with seasonal softness weighing on fresh contracts. The sequential drop comes after several strong quarters.

Dividend announcement on the cards
TCS has confirmed that its board will consider an interim dividend proposal at today’s meeting. If declared, the dividend will be paid to shareholders whose names appear on the company’s register as of Wednesday, July 16, 2025.

TCS has maintained a consistent capital return policy, distributing 80–100 per cent of free cash flows to shareholders. Over the past three years alone, the company has paid Rs 1.09 lakh crore in dividends. Since its listing, TCS has declared a dividend every single quarter, alongside three bonus issues and five share buybacks.

In FY25, TCS declared a total dividend of Rs 126 per share, comprising three interim dividends of Rs 10 each, a special dividend of Rs 66 and a final dividend of Rs 30.

In FY24, the total dividend stood at Rs 73 per share, along with a buyback worth Rs 17,000 crore at Rs 4,150 per share. The total shareholder payout (including buyback and tax) for the year touched Rs 47,445 crore.

TCS' Integrated Annual Report for FY25 states that the shareholder payout for the year reached Rs 45,588 crore, with a payout ratio of 94 per cent.

TCS Q1 results: Key things to watch
Beyond the headline numbers, investors will be tuned in to commentary on demand softness across verticals like retail, manufacturing, and BFSI; the impact of client insourcing, the progress in GenAI adoption and its influence on traditional IT spends and updates on Global Capability Centres (GCCs). They would also seek more clarity on the margin management amid a challenging macro backdrop.

TCS target prices
Equirus Securities has an 'Add' rating on TCS with a target price of Rs 3,460. HDFC Securities also has an 'Add' rating on TCS with a target of Rs 4,070. BNP Paribas has a target of Rs 4,400 on the stock. Choice Broking has a target of Rs 3,950 on TCS, with a 'Buy' call. ICICI Securities prefers TCS as it finds its valuations being comfortable, supported by healthy fundamentals. PL Capital also likes TCS among IT names.