TCS shares, which have fallen about 18% so far in calendar year 2025, were trading flat ahead of the results announcement, expected post-market hours. Leading brokerages are unanimous in forecasting a sequential revenue decline for TCS in Q1, primarily due to the wind-down of the BSNL project.
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Revenue Growth Projections
Kotak Institutional Equities expects a 0.4% quarter-on-quarter revenue decline in constant currency terms, while BNP Paribas forecasts a steeper 1.3% decline in constant currency but a 1.3% growth in USD terms. Motilal Oswal and Nomura both project a 0.5% sequential decline, with Nirmal Bang being the most pessimistic, estimating a 2.1% decline in constant currency. Overall, the consensus among brokerages points to a revenue decline of 0.5% to 1.3% in constant currency terms, with the BSNL project ramp-down cited as the primary drag across all estimates.
Margin Outlook
On the profitability front, brokerages expect margin pressures to persist. BNP Paribas forecasts the most significant impact, projecting a 30 basis point quarter-on-quarter contraction in EBIT margins to 23.9%. Nomura expects a 10 basis point decline, while Kotak anticipates margins to remain flat despite currency tailwinds.
Motilal Oswal also expects sequentially flat margins, and Nirmal Bang projects a slight margin contraction. The margin pressure is attributed to lower utilization levels, higher visa costs, continued talent investments, and constrained operating leverage across the industry.
Deal Wins Forecast
Deal win expectations remain range-bound, with Kotak projecting US$8–9 billion—flat year-on-year—while Nirmal Bang forecasts a more conservative US$7–8 billion for the quarter. Nomura expects deal wins in the US$7–9 billion range, excluding any mega deals, suggesting steady but unspectacular momentum. The subdued expectations reflect a prevailing “wait and watch” approach among clients amid macro uncertainties. Brokerages note that while decision-making delays persist across verticals, there have been no signs of outright cancellations.
7 Critical Watch Points for TCS Results:
1) BSNL Project Impact
Kotak expects BSNL-related revenues to decline by US$57 million, representing a 75 basis point quarter-on-quarter impact. The wind-down of this single project is the primary driver behind the overall revenue decline expectations.
2) Developed Markets Growth
Despite the overall revenue decline, Kotak forecasts 0.3% growth in developed markets. Investors will closely watch whether international business can offset the impact of domestic project wind-downs and support future growth.
3) BFSI Vertical Performance
Multiple brokerages highlight BFSI as a key vertical to watch. Motilal Oswal expects it to “remain resilient,” while others are looking for updates on potential market share losses due to client insourcing trends.4) Deal Win Quality
With deal wins expected in the US$7–9 billion range, focus will be on the quality and conversion timeline of these deals, especially given the “wait and watch” client sentiment.
5) GenAI Adoption Impact
Kotak specifically mentions watching for “enterprise GenAI adoption and its deflationary impact,” while other brokerages seek commentary on AI-related deal pipeline and execution.
6) Margin Pressures
BNP Paribas expects EBIT margins to contract to 23.9%, with multiple factors including lower utilization, higher visa costs, and talent investments weighing on profitability.
7) US Tariff Uncertainty
Kotak emphasizes investor focus on “tariff uncertainty impact on demand across verticals,” particularly in manufacturing and retail sectors, given the current US policy environment.
As TCS prepares to announce results, investors will be particularly focused on management’s commentary about demand recovery timelines and the company’s ability to navigate the current challenging environment while maintaining its market leadership position.
