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TCS Q2 Results: Earnings Preview Signals Modest Growth, Markets Eye Management’s Silence
Mumbai | October 8, 2025 — Tata Consultancy Services (TCS), India’s largest IT exporter, is set to open the corporate earnings season on October 9 with its July–September quarter results. While brokerages remain divided on the company’s growth prospects, the spotlight this time is not just on numbers but also on what TCS will not be doing — holding a post-results press conference.
The company, led by CEO K Krithivasan, confirmed that its customary media interaction stands cancelled as the date coincides with the death anniversary of industrialist Ratan Tata. Instead, only an analyst call will be conducted. This is the second consecutive year that TCS has skipped its quarterly briefing in September out of respect for the Tata patriarch, underlining the emotional weight his legacy continues to carry within the group.
What Analysts Expect
Brokerages project a mixed bag for TCS’ second quarter. Profit after tax (PAT) is estimated to rise between 3.7% and 9.6% year-on-year, placing earnings in the range of ₹12,300–13,000 crore. Revenues are expected at ₹64,200–65,700 crore, reflecting a muted 0.7–2.2% growth compared with last year.
Margins are likely to remain largely stable on an annual basis, though most analysts expect a sequential decline due to wage hikes, lower utilization, and the wind-down of the BSNL mega deal that had boosted earlier revenues.
“Q2 will be more about commentary than the numbers. Investors want clarity on discretionary spending trends, especially in BFSI, and how TCS is recalibrating its delivery model with the ongoing surge in AI-driven demand,” said a Mumbai-based analyst with a foreign brokerage.
Key Headwinds: From Washington to Wall Street
Beyond its balance sheet, TCS faces external pressures that could shape investor sentiment.
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H-1B Visa Shock: The Trump administration’s decision to hike H-1B visa fees to $100,000 has rattled Indian IT firms. With the US accounting for more than half of TCS’ revenues, this steep cost increase threatens to dent profitability on overseas projects.
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Outsourcing Tax Proposal: A proposed 25% outsourcing tax in the US is adding further uncertainty, potentially complicating cost structures for contracts signed with American enterprises.
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Muted Client Spending: Global clients remain cautious on discretionary projects, choosing instead to focus on cost takeouts and efficiency. This has slowed deal flow in areas like retail and technology services.
5 Things to Watch on October 9
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Deal Pipeline: Whether TCS can sustain its $7–9 billion deal win trajectory in a weak spending environment.
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Guidance on BFSI: The banking and financial services vertical has been under stress; management’s commentary here could set the tone for the sector.
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Generative AI Adoption: Investors are keen to know how TCS plans to monetize GenAI services, a key battleground for global IT firms.
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Employee Costs: With talent investments and wage revisions in play, margin discipline will be closely watched.
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Dividend Policy: The board is also expected to declare a second interim dividend, underscoring TCS’ cash-rich balance sheet.
Why Markets Care
TCS is widely seen as a bellwether for India’s $250-billion IT services industry. Its results typically shape expectations for peers like Infosys, Wipro, and HCLTech. Any commentary on demand in North America or Europe will ripple through the broader sector.
The company’s stock has already been volatile in the run-up to earnings, reflecting investor anxiety over global headwinds. As of late August, TCS was trading at around ₹3,027 on the NSE, with analysts split on near-term upside.
A Test of Leadership for Krithivasan
For CEO K Krithivasan, who took charge in 2023 after Rajesh Gopinathan’s sudden exit, this quarter is another test of his ability to navigate a challenging macro environment. While his tenure has so far been marked by stability, the mounting regulatory hurdles in the US and muted demand growth present fresh obstacles.
“Krithivasan’s biggest challenge is balancing resilience with reinvention. He has to show that TCS can still deliver consistent earnings while adapting to a world where clients want both efficiency and AI-led transformation,” noted an industry veteran.
The Broader Picture
The second-quarter results won’t just reflect TCS’ numbers — they will serve as a barometer of the Indian IT industry’s health in the face of geopolitical shifts and slowing tech budgets.
For now, the Street is bracing for modest growth but is equally alert to surprises. Whether TCS can beat expectations or simply tread water will be known tomorrow evening, but one thing is certain: investors will hang on every word of the management commentary, even in the absence of the usual press room buzz.
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