Tata Consultancy Services (TCS), India’s largest IT services company, is set to announce its financial performance for the second quarter of FY27 on Thursday, October 8, with the Street largely anticipating another soft quarter from the tech bellwether.
Indian tech majors are expected to post a modest sequential performance, rather than a meaningful revival in demand. Accenture’s latest results support this view, with its management stating that overall demand, including discretionary spending, did not meaningfully change during the quarter.
Analysts expect TCS Q2 to be better than Q1, based on an uptick in July and August. However, September is likely to have been affected by rate hikes and weakness in the Middle East, particularly in the manufacturing and retail sectors.
TCS Q2FY27 Results: What time will TCS announce results and the dividend?
TCS had released its June-quarter results after market hours and is therefore expected to announce its Q2FY27 results after market hours, around a similar time. The board is also expected to consider an interim dividend.
The company has announced a interim dividend of ₹12 per equity share in Q1. In FY26, TCS returned ₹39,571 crore to shareholders through dividends.
Meanwhile, since the release of last quarter’s results, TCS shares have corrected 11%, widening their year-to-date losses to 35% and putting the stock on track for its biggest annual drop since 2008. Investors are now likely to focus on the company’s deal wins, revenue growth, margins, management commentary, and outlook for the remainder of FY27.
The global economic backdrop has worsened since June, as global central banks have begun hiking interest rates in an effort to control inflationary pressures, which have been brought about by the ongoing war in West Asia.
What are brokerages expecting from TCS Q2 results?
Domestic brokerage firm JM Financial expects TCS to report a 0.5% quarter-on-quarter (QoQ) constant-currency (CC) revenue growth in Q2 FY27, with a 20-bps sequential decline in CC growth. Revenue in dollar terms is estimated to rise 0.3% QoQ to $7.65 billion, while rupee revenue is expected to increase 1.2% QoQ to ₹73,110.2 crore, up 11.1% year-on-year.
While Systematix Institutional Equities has a slightly higher revenue growth estimate, expecting the firm to post 0.6% QoQ growth in CC revenue, supported by a recovery in its international business, with BFSI and manufacturing expected to aid growth.
It estimates net revenue in dollar terms at $7.67 billion, up 2.7% YoY, while rupee revenue is projected at ₹73,296.9 crore, representing 1.4% QoQ and 11.4% YoY growth.
On profitability, JM Financial projects EBIT at ₹17,609 crore, representing a 1.7% QoQ and 6.3% YoY increase, while Systematix estimates that EBIT will reach ₹17,694.9 crore, up 2.2% QoQ and 6.8% YoY.
In terms of margins, JM Financial projects the EBIT margin to improve by 10 bps QoQ to 24.1%, while Systematix sees a stronger 18 bps QoQ expansion to 24.1%. However, both brokerages expect margins to remain lower year-on-year.
On the bottom line, JM Financial expects net profit at ₹13,702.5 crore, down 1.1% sequentially but up 13.5% YoY. Systematix, meanwhile, has a modestly lower PAT estimate of ₹13,688.8 crore, down 1.2% QoQ but up 6.1% YoY.
On deal wins, JM Financial expects TCS to report $8-10 billion in deal wins during the quarter, while Systematix expects total contract value (TCV) of $9-10 billion, excluding the €1.25 billion Porsche contract.
Both brokerages expect margins to improve as the impact of wage revisions eases, although JM Financial cautions that higher investments in the business could offset some of the margin gains.
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