IT stocks slip ahead of TCS Q1 earnings: HCL Tech, Wipro, Tech Mahindra top losers; Nifty IT down over 1%

IT stocks were trading lower on Wednesday, July 9, as investors eye earnings announcements by the companies starting tomorrow.

The Nifty IT index tumbled 1.13% to an intraday low of 38,540.65 levels, with shares of HCL Technologies being the biggest laggard.

As many as nine stocks declined, and only one advanced on the index during the intraday period.

Further, Tech Mahindra (-1.14%), Wipro (-1.02%), Tata Consultancy Services (-0.92%), and LTI Mindtree (-0.89%) were also trading lower. Shares of Oracle Financial Services Software (-0.80%), Persistent Systems (-0.73%), Coforge (-0.67%), and Infosys (-0.56%) also dragged the index. Mphasis (0.55%) was the only rising firm on the Nifty IT index.

IT services firm Tata Consultancy Services (TCS) will be announcing its April-June quarter earnings on Thursday for the financial year 2025-26.

TCS is expected to report a marginal increase in revenue of up to 1.5% on a sequential basis. Revenue is expected to remain between ₹64,320 and ₹64,620 crore, compared to ₹64,479 crore in the previous quarter and ₹62,613 crore in Q1 FY25. 

Revenue is likely to see low single-digit growth due to the winding down of key deals, such as the near-completion of the BSNL project. Meanwhile, foreign exchange gains could bolster the topline.

TCS's net profit is expected to remain stable at around ₹12,200 crore in the June quarter. The company reported a net profit of ₹12,224 crore in Q4FY25 and ₹12,040 crore in Q1FY25. The EBIT margin is expected to decline by 20–40 basis points to 24.2%, and new deal wins are projected to be worth between $7 and $9 billion.

Investors will be looking to the TCS results for the management's commentary on U.S. tariffs and their impact on the company's overall business. 

Analysts will also closely watch out for major deal wins in the first quarter of the current financial year. The Mumbai-based IT company reported record deal wins in the previous quarter. Its total contract value (TCV) stood at $12.2 billion in deal wins, with a book-to-bill ratio of 1.6.

The market will also keenly watch out for guidance on US demand, deal conversion cycles, and pricing amid the new policy uncertainty. The outlook on discretionary spending levels across verticals will also be closely tracked.