The Nifty IT index tumbled in the early session, as investors rushed to offload their holdings on Friday, July 11, following India's largest IT services player Tata Consultancy Services' poor earnings for the quarter ended June 30, 2025.
At 9.30 a.m., the Nifty IT index was quoting 37,902.65, sinking 1.2 percent, dragged by shares of TCS, Wipro, Infosys, and LTIMindtree. Most of the losses were seen in large-cap IT services players, while the midcap peers performed relatively better in comparison.
"Q1 results of TCS indicate continuing struggle for IT companies, particularly large-cap IT. However, midcap IT is likely to do well. Investors may focus on fairly valued stocks with earnings visibility," said VK Vijayakumar, Chief Investment Strategist, Geojit Investments."
TCS said its Q1FY26 net profit rose 6 percent year-on-year to Rs 12,760 crore, from Rs 12,040 crore reported in the same quarter last year. On a sequential basis, profit grew 4.4 percent from Rs 12,224 crore, surpassing Street expectations. However, India's largest IT company said its revenue from operations grew 1.3 percent to Rs 63,437 crore for the April-June quarter.
Japan-based brokerage Nomura retained its 'neutral' call, trimming its target price to Rs 3,780. from Rs 3,820 per share, as the growth visibility for FY26 still remains hazy. Further, the brokerage noted that TCS' constant currency was lower than consensus estimates. Going ahead, significant margin improvement in the year is unlikely, noted Nomura.
HSBC reaffirmed its 'hold' call, with a price target of Rs 3,665 per share. The first quarter earnings show was a miss on the topline, largely led by BSNL and also the international business arm. The broking house added that the company seems to be struggling on profitability as well, and the demand commentary is weaker-than-expected.
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