Tata Consultancy Services (TCS) has posted solid deal wins in Q2, including a $640 million contract with Scandinavian insurer Tryg. Analysts observe early signs of recovery in discretionary IT spending in the BFSI and Technology sectors, while Manufacturing, Automotive, Retail, and Communications remain under pressure.
Centrum analysts note that client caution continues, resulting in prolonged decision-making. Recent deal signings focus on cost-efficiency and vendor consolidation. The use of AI tools is anticipated to enhance revenue per employee and support overall productivity.
As the largest order book holder among Indian IT firms, TCS’ commentary on demand outlook is expected to shape sentiment for the entire sector. The IT industry continues to face macroeconomic headwinds, with US tariff concerns dampening client tech budgets.
Brokerages foresee muted Q2FY26 performance for TCS, projecting 0.2-1% QoQ revenue growth in constant currency, primarily led by international markets, with domestic business staying flat. Centrum expects 1% growth, driven by BFSI and Hi-tech on a low Q1 base.
Axis Direct anticipates stronger sector growth in H2FY26 due to improved execution and stability. TCS’ BSNL project is expected to gain momentum in Q3, per Motilal Oswal. Shares rose 0.29% ahead of the results announcement.