Tcs Shares Fared Worse Than Infosys Ytd; Will Q1 Results Trigger A Recovery?

Tata Consultancy Services (TCS) has delivered a antagonistic return of 18 per cent successful 2025 truthful far, which is worse than adjacent Infosys' 14.32 per cent diminution for nan quarter.

The largest IT patient has grown amended than Infosys successful FY25. But HSBC expects nan maturation to converge for some companies successful FY26. TCS would denote its Q1 results later successful nan day.

TCS and Infosys person reported beardown woody bookings, but existent gross conversion has been sluggish, impacting wide growth, Nirmal Bang Institutional Equities said successful its Q1 preview note. It said muted request situation continues to measurement connected Tier-1 IT companies pinch gross maturation expected to beryllium mostly flattish successful QoQ CC terms. Client be aware astir discretionary spending remains an overhang, pinch BFSI, Retail, and Hi-Tech verticals still witnessing anemic budgets, it said.

The brokerage has 'Hold' standing connected some TCS and Infosys, pinch targets of Rs 3,829 and Rs 1,686, respectively. 

Systematix Institutional Equities said nan dollar gross maturation of large-cap IT companies whitethorn scope from minus 1.4-2.5 per cent for 1QFY26. "Infosys is expected to lead connected acquisition and woody ramp ups, followed by Tata Consultancy Services (TCS), HCL Technologies, and Tech Mahindra, supported by favorable rate tailwinds," Systematix said.  

This brokerage sees TCS' Q1 profit to emergence 2.2 per cent YoY against an anticipated 7.4 per cent maturation successful Infosys' Q1 profit. Q1 Ebit separator for TCS is seen astatine 24 per cent against 20.9 per cent for Infosys. 

That said, nan brokerage has a 'Hold' connected Infosys pinch a target of Rs 1,600, and 'Buy' connected TCS pinch a target of Rs 4,017. 

Sharekhan expects Infosys to lead gross maturation among Tier-1 companies, pinch gross maturation of 1.7 per cent QoQ successful CC position aided by seasonality and anemic guidelines of Q4FY25. 

"TCS, TechM, HCL Tech and Wipro are expected to diminution 0.4 per cent/0.6 per cent/0.7 per cent and 2.5 per cent QoQ respectively successful CC position while LTIM is expected to present humble gross maturation of 1% QoQ successful CC terms," Sharekhan said.

In nan lawsuit of EBIT margin, Sharekhan expects Infosys and TCS to study 25 bps  and 10 bps QoQ betterment successful margin. This brokerage has 'Buy' connected TCS pinch a target of Rs 4,050. 

Ahead of Q1 results, Nomura India said it has Infosys arsenic apical picks successful nan largecap space. ICICI Securities prefers TCS among IT names owed to valuation comfort. 

HSBC prefers Infosys and said nan semipermanent banal return trajectory gradient will not only beryllium little than successful nan past, but IT stocks will besides beryllium a batch much cyclical astir this mean path.