Pressmediaofindia
Related Articles
14-07-2026
Bureau Report
NEW DELHI: India’s Tata Consultancy Services rose as much as 4.1% on Friday after better-than-expected quarterly revenue on strong banking demand and rising AI revenue, though analysts said the broader sector recovery was likely to remain gradual.
Shares of the country’s top software services exporter trimmed some gains to close about 1% higher at 2,069 rupees, helping lift the benchmark Nifty 50, 1.02% higher.
The IT index gained about 1.96% during the session.
Analysts said investors were looking at positive growth expectations for TCS in the coming quarters, led by AI revenue, with multiple brokerages also citing strong growth in banking, financial services and insurance, high-tech and regional markets.
“The company expects AI adoption growth and transformation to pick up, and they expect better numbers,” said Piyush Pandey, lead IT Analyst at Centrum Broking.
Annualized AI revenue crossed $2.6 billion, driven by faster deployments across industries, rising from $2.3 billion in the previous quarter, TCS said.
Quarterly sales rose 14% to 722.75 billion rupees ($7.58 billion), while CEO K Krithivasan signaled a second-quarter recovery in manufacturing and life sciences demand.
While the results offered investors early signs that growth may be stabilizing in India’s $315 billion IT sector, analysts said a broader recovery was likely to remain gradual as demand concerns remained after expectations of another subdued quarter.
Flattish international revenue and a 3% year-on-year fall in headcount suggested continued sluggishness, according to Citi, while Nomura analysts said macro uncertainty still weighed on the near-term outlook.
Brokerages had flagged a low growth rate for the company in fiscal 2027 due to AI-led deflation.
The earliest the net AI impact will turn accretive for the sector and company is mid- to end-fiscal 2028, HSBC said post the results, adding that TCS’ quarterly earnings offered limited grounds for pessimistic investors to reassess their stance.
Rivals Infosys, HCLTech and Wipro are expected to report their quarterly earnings later in the month.
TCS, India’s top software services exporter, beat quarterly revenue estimates on Thursday, helped by higher spending by banking clients and a weak rupee.
The results kick-start the first-quarter earnings season for the $315-billion Indian IT sector. Analysts have lowered their expectations for the industry as global clients cut back on non-essential tech spending and on worries that advanced AI tools could disrupt business models of software companies.
The fears have wiped out $100 billion in market capitalization of India’s Nifty IT constituents since February.
On a post-earnings call, TCS CEO K Krithivasan said he was “optimistic” of a turnaround in tech spending among manufacturing and life sciences clients in the second quarter, while a revival in consumer businesses depended on geopolitics.
Consolidated sales jumped 14% year-over-year to 722.75 billion rupees ($7.58 billion) in the three months ended June. That compares with analysts’ average estimate of 720.30 billion rupees, according to data compiled by LSEG.
Two mega-deal wins in the banking, financial services and insurance sector last fiscal boosted revenue, with sales from the key business vertical rising 2.4% during the quarter.
A weaker rupee also boosted revenue at IT firms as they bill clients in foreign currencies and incur most costs in rupees.
