Shares of Tata Consultancy Services fell 2 percent to 2,016 rupees on the BSE on Thursday ahead of the company’s April-June results, which will mark the start of the first-quarter earnings season for information technology firms. The stock has declined more than 36 percent this year due to concerns over artificial intelligence and inflation linked to Middle East tensions. Analysts expect modest profit growth for the period, with revenue rising 13 percent year on year and profit increasing 4 percent, according to averages from six brokerages. Sequential revenue growth is projected to stay nearly flat. Demand for IT services is likely to remain weak, though partly supported by large deal ramp-ups and AI-related spending. Margins could face pressure from wage increases and AI investments, offset somewhat by currency movements and efficiency gains. One brokerage forecasts 1 percent sequential revenue growth, driven by banking, financial services, insurance, and technology sectors, along with rupee depreciation. Operating margins are seen declining nearly 100 basis points sequentially. Key areas to watch include client demand, deal pipeline, sector commentary, and the full-year outlook. Other notes highlight macro uncertainty from Middle East conflict and US rate questions as factors limiting client spending. Heightened competition among IT providers is also noted, with AI benefits seen passing quickly to clients. The current earnings period is expected to show subdued trends, with mid-sized firms likely outperforming larger ones. TCS shares have dropped 39 percent over the past year and touched a 52-week low near 1,977 rupees earlier this month. The stock trades at about 15 times earnings and holds a market value of 7.45 lakh crore rupees.
