Q1 FY26 results: Some deliver, some miss estimates; all eyes on next leg of earnings

Besides, a major trend from the earnings so far has been the companies' optimistic guidance and commentary for the second quarter and the rest of the current fiscal year (FY25-26).

IT services major Tata Consultancy Services (TCS) reported subdued numbers for the June quarter; however, it was the management commentary that dented investor sentiment, as the Street had already priced in muted performance.

The company said it was experiencing a "demand contraction" due to the continuing uncertainties on the macroeconomic and geopolitical fronts and added that it does not see a double-digit revenue growth in FY26.

In what may constitute a change to earlier commentary, the managing director and chief executive officer (CEO) K. Krithivasan said he expects the international revenues to fare better in FY26 as compared to the year-ago period. In April, the company had said that the overall revenue growth in FY26 will be better than FY25.

Similarly, Tata Elxsi reported a weak set of numbers for the quarter gone by. Manoj Raghavan, CEO and MD, said, "This quarter was challenging across key markets, with macroeconomic uncertainties and industry- and customer-specific issues impacting R&D spend and decision-making cycles across geographies."

However, the MD added that they expect to bring back growth in Q2 and beyond, on the back of the large deal ramp-ups and a healthy deal pipeline.

Another Tata Group company, Tata Technologies, said they remain optimistic about a sequential recovery in Q2 and a stronger second half of FY26.

"Our deal pipeline today is more robust than a year ago, and the early momentum we are seeing provides greater visibility and conviction in improved conversion through the year," CEO and Managing Director Warren Harris said.

On the retail front, Shoppers Stop reported a narrowing of consolidated net loss to ₹15.74 crore for the quarter under review. Shoppers Stop Managing Director and Chief Executive Officer (CEO) Kavindra Mishra said the company witnessed sales growth in the quarter, driven by premiumisation.

"Consumers are becoming more discerning and are willing to spend more. In a crowded marketplace, premiumisation allows retailers to stand out," the CEO added.

On the way forward, Mishra said, "We believe our work and strategies on premiumisation will continue to have better results soon, and besides, we need to focus on offering higher-quality products."

On the other hand, Avenue Supermarts Ltd, which operates the DMart retail chain, missed analyst estimates.

Net profit for the quarter came in flat at ₹772.97 crore, barely changing from ₹773.82 crore a year ago and significantly below the expected ₹883 crore. The muted bottom-line performance has raised investor concerns about margin pressures in a competitive retail environment.

Meanwhile, hotels and hospitality companies Indian Hotels and ITC Hotels reported an encouraging set of numbers for the June 2025 quarter.

Amitabh Chaudhry, the bank's managing director and chief executive officer (CEO), told reporters that Axis Bank decided to adopt a more prudent way of asset recognition, upgrades and treatment of accounts that have seen one-time settlements, as it had announced in the previous quarter, and added that economic losses due to the change will be "minimum" going ahead.

However, one company that lived up to the expectations and came out with flying colours was oil-to-telecom conglomerate Reliance Industries (RIL).

The sharp jump in profit came on the back of a strong surge in other income in the first quarter. Reliance Industries' other income in the June quarter jumped 280% to ₹15,119 crore as against ₹3,983 in the year-ago period.

That said, the Street is now eyeing the next leg of earnings. The market is keenly awaiting FMCG giants ITC, HUL, Tata Consumer Products, Marico, Dabur, and Godrej Consumer Products to release their earnings.

The FMCG companies have been the cynosure of the market for the past month, given the encouraging business updates and outlook.

Besides, earnings of banking behemoths HDFC Bank, ICICI Bank, YES Bank, SBI, and other big public sector banks will help traders and market participants to navigate the market ahead.

From the infrastructure space, L&T, ABB India, and Cummins will be crucial to assess how the economic activity has been and what lies ahead.

From the auto space, Maruti Suzuki, Tata Motors, and Mahindra & Mahindra, among others, will be key.