TCS Q2 results: Here is what to expect from the IT major on Thursday

The Q2FY26 earnings season will kickstart today with IT major Tata Consultancy Services reporting its earnings. Investors and market participants will be keenly watching the IT sector results, especially due to sectoral headwinds. Shares of Tata Consultancy Services closed nearly 1.9% higher in anticipation of better-than-expected Q2FY26 results. On a YTD basis, the TCS share price is down 23% to date, while the sectoral NIFTY IT index is down over 15% in the same period.

Here is what to expect from the Q2FY26 results

According to the analyst expectations, the Tata Consultancy Services’ revenue growth is expected to remain softer during the quarter, with modest growth expected on a QoQ basis. The consensus estimates published on investing.com forecast revenue of ₹65,300, which reflects a 3% sequential rise in the topline. Revenue growth is likely to be impacted by a weak demand environment and slower deal wins. At the segment level, BFSI and Tech are expected to continue positive momentum, while Life Sciences & Healthcare and communications are expected to dampen the overall earnings composition for the quarter.

On the operating front, the margins are expected to post flat-to-positive growth, primarily driven by currency depreciation, while wage hikes to junior employees may offset the currency benefit. In addition, lower utilisation from a low-margin BSNL deal could further dampen the margins. According to HSBC research, the layoff impact is expected to be visible in the coming quarters and not the Q2FY26.

Lastly, investors and market participants will mostly look out for deal wins during the quarter and management commentary on the topline outlook for the company. In addition, guidance on the US demand, impact of AI on pricing and deal conversion rate will be keenly watched.

TCS Q1FY26 results

The revenue for the quarter ended June 2025 jumped 1.6% YoY and declined sequentially by a similar percentage point at ₹63,437 crore compared to ₹62,613 crore in the previous year’s similar quarter and ₹64,479 crore in the previous quarter. In constant currency terms, the revenue declined 3.1% YoY. The total contract value for the quarter stood at $9.4 billion as compared to $12.2 billion in the previous quarter