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Informist, Wednesday, Apr. 8, 2026

 

By Shakshi Jain

 

NEW DELHI – Information technology services major Tata Consultancy Services Ltd. is expected to post a marginal sequential decline in adjusted net profit for the March quarter, despite a moderate rise in revenue, because of foreign exchange losses, planned investments, and ramp-up costs tied to large deals, according to analysts. Faster growth in the company's overseas business is expected to eclipse a marginal decline in its India business, brokerages said, after factoring in some inorganic revenue contribution from recently acquired US company Coastal Cloud Holdings, LLC.

 

If analysts' consensus estimates hold, this would be the second successive quarter of a sequential decline in net profit alongside a rise in revenue for the company. The IT sector bellwether's consolidated net profit for the March quarter is expected to decline 1.8% to INR 137.92 billion from the net profit reported for the December quarter, excluding exceptional items, according to the average of estimates from 15 brokerages. However, this would mean a year-on-year growth of nearly 13% on the metric. The highest estimate for net profit for the March quarter is INR 140.58 billion by Kotak Securities Ltd. and the lowest is INR 135.28 billion by HDFC Securities Ltd.

 

The Tata Group company is expected to report a sequential rise of over 4% and annual growth of 8.4% in consolidated revenue for the reporting quarter to INR 698.93 billion, according to the average of estimates. The highest estimate for top line is INR 707.93 billion from Dolat Capital Market Pvt. Ltd. The lowest is INR 694.34 billion from YES Securities (India) Ltd.

 

For the December quarter, TCS had reported a consolidated net profit of INR 106.57 billion on a revenue of INR 670.87 billion. In the absence of the one-time costs reported for the trailing quarter, its bottom line would have been about INR 140.51 billion. For the year-ago March quarter, TCS had reported a consolidated net profit of INR 122.24 billion on a revenue of INR 644.79 billion.

 

Brokerages estimate that Coastal Cloud Holdings would account for a share of up to 0.5% in TCS's total revenue for the March quarter. "We expect international business to grow faster and believe that India business will decline marginally," Kotak Securities said. Other brokerages said the detailed additional purchase order from Bharat Sanchar Nigam Ltd. is still awaited, which may have held back growth in the company's domestic business.

 

Among verticals, brokerages said the technology sector and banking, financial services, and insurance are likely to have led growth for TCS in the March quarter.

 

Overall, they estimate sequential growth of 1.0-1.5% in the company's constant currency revenue for the reporting quarter. In dollar terms, the IT behemoth's March quarter revenue is estimated at $7.62 billion, as per the average of estimates from 12 brokerages.

 

Most brokerages expect the company to report deal wins in the range of $7 billion to $10 billion for the March quarter. Nomura Financial Advisory and Securities (India) Pvt. Ltd., on a more optimistic note, said deal wins should exceed the $10 billion mark as the March quarter is seasonally strong.

 

"...the base quarter had benefit of a large deal renewal," Kotak Securities said. "Deal TCV (total contract value) will likely decline 22% yoy and (be) stable on qoq basis. Note there was no mega-deal closure in the quarter."

 

OPERATIONAL ESTIMATES

TCS's earnings before interest and tax margin for the reporting quarter is expected to expand by 10 basis points sequentially to 25.3%, according to the average of estimates from 11 brokerages. Annually, this would mean a rise of 110 basis points.

 

Benefits from operational efficiencies and the depreciation of the rupee against the dollar are expected to offset the impact of higher variable pay provisioning and reinvestments of the company, brokerages said.

 

For FY26, the company is expected to report an increase of over 7% in consolidated net profit to INR 520.32 billion, alongside a 4% rise in revenue to INR 2.66 trillion, as per the average of estimates from six brokerages.

 

TCS will announce its March quarter earnings Thursday. Investors await the management's commentary on demand and deal pipeline, likely price deflation due to artificial intelligence, progress tied to the planned data centre investments, impact of employee restructuring, the conflict in West Asia, and the overall outlook for FY27. 

 

Wednesday, shares of TCS ended 0.8% higher at INR 2,559.20 on the National Stock Exchange. The stock is down 21% since the company reported its December quarter earnings. It is down nearly 30% from its 52-week high of INR 3,630.50, recorded on May 12.

 

Of the 20 research reports on the company available with Informist, 18 have a "buy" recommendation on the stock while the other two have a "hold" call. The average target price of the "buy" recommendations is INR 3,793, up over 48% from Wednesday's closing price.

 

Following are the Jan-Mar earnings estimates, in INR billion, for TCS from 15 brokerages, in descending order of net profit estimate:

 

Broking firm	Net Sales	Net Profit	Revenue ($)	EBIT margin (%)
Kotak Securities Ltd.	704.35	140.58	7.62	25.3
Prabhudas Lilladher Pvt. Ltd.	694.9	139.60	7.62	25.3
Nuvama Wealth Management Ltd.	697.14	139.16	7.64	25.4
Emkay Global Financial Services Ltd.	699.81	139.00	7.61
Dolat Capital Market Pvt. Ltd.	707.93	138.75	7.65	25.2
Equirus Securities Pvt. Ltd.	705.96	138.34	7.63	25.4
JM Financial Institutional Securities Pvt. Ltd.	697.64	138.03	7.62
IDBI Capital Market Services Ltd.	696.36	137.88	7.61	25.1
Motilal Oswal Financial Services Ltd.	696.09	137.79
YES Securities (India) Ltd.	694.34	137.63
Centrum Broking Ltd.	695.17	137.50		25.3
ICICI Securities Ltd.	704.81	137.36	7.64	25.2
Nomura Equity Research	697.99	136.56	7.64	25.3
Anand Rathi Share and Stock Brokers Ltd.	695.91	135.34	7.61	25.3
HDFC Securities Ltd.	695.63	135.28	7.62	25.2
Average	698.93	137.92	7.62	25.27

 

End

 

US$1 = INR 92.58

 

Edited by Rajeev Pai

 

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