TCS, HCL Tech Q3 Preview Sends IT Stocks Lower
TCS, HCL Tech Q3 Preview Sends IT Stocks Lower
IT giants like TCS and HCL Tech slip as Q3FY26 previews roll out, with investors watching margins, AI bets, and dividend plans amid a bruising market.
Markets opened weaker as the Q3 results season kicks off for major IT names. IT stocks slid, with some names down about 1%, while the broader market tumbled as much as 8% in early trade. Tata Consultancy Services and HCL Technologies led the retreat, with TCS down 0.8% to 3,182 and HCL Tech down 1.1% to 1,643.95, as traders priced in a cautious start to the quarter. Both companies are set to consider a third interim dividend for FY26.
Previews point to a steady quarter for TCS, with Equirus Securities estimating net sales of 67,094.4 crore, up 4.9% year-on-year and 2% quarter-on-quarter. EBITDA is seen at 18,453.3 crore, up 8.3% YoY and 2.6% QoQ, with an EBIT margin of around 25.4% as rupee depreciation and productivity gains help offset wage hikes. Net profit is pegged at 13,229.6 crore, rising about 6.9% YoY and 2.5% QoQ. Dollar revenue is expected to grow around 1% QoQ in constant currency terms, reflecting seasonal softness and softer international billing days.
The preview list for Q3FY26 includes other names such as Infibeam Avenues, Maharashtra Scooters, GTPL Hathway, Gujarat Hotels, and AR Wealth, among others. While these names add color to the results week, the broader market narrative remains focused on how AI investments, client spending, and deal pipelines will shape the IT sector’s trajectory this quarter. Analysts warn that commentary may be more crucial than numbers, given expectations of modest growth across the larger IT space and a shift toward margins supported by cost controls and currency moves.
Investors will also monitor how AI-driven efficiency and potential smaller deal wins influence guidance, while watching for indications on 2026 IT budgets and client demand. A key theme remains whether the sector can sustain margin expansion in the face of wage pressures, even as some relief comes from rupee trends and automation benefits. Overall, the quarter is shaping up as a test of management outlooks and the sector’s ability to translate AI investments into steadier growth.
