IT

TCS Q4 Results & The Future of Indian IT Stocks: What to Expect Now

Published

1 week ago

April 10, 2025

💻 Introduction: The Spotlight Is On TCS

The Indian stock market is heating up as Q4 earnings season kicks off. All eyes are now on Tata Consultancy Services (TCS), one of India’s biggest IT giants. With results due tomorrow, investors are wondering — will TCS deliver a strong performance, or will it disappoint?

Even more importantly, what does this mean for the entire Indian IT sector, especially when IT stocks have been under pressure for months?

Let’s take a closer look in plain, simple English.

The Current Mood: Markets Are Cautious

TCS will announce its Q4 results tomorrow evening, and expectations are low. Here’s what analysts like Ashish from CNBC predict:

Constant Currency Growth: Likely to be flat (0% growth).
Rupee Revenue: Might grow by around 1%.
Dollar Revenue: Could see slight pressure.
Operating Margins: May improve slightly due to rupee depreciation.

So, no fireworks expected here. In fact, the focus is not even on the numbers anymore. What truly matters is the management’s commentary on future business, deal wins, and client sentiment.

What’s Impacting TCS?

1. BSNL Deal Cooling Down

Earlier, TCS had a large deal with BSNL, which helped boost numbers. But now, that deal is not contributing as strongly, which may hurt growth.

2. Currency Advantage

A weaker rupee helps exporters like TCS. But this benefit may not be enough to drive enthusiasm, especially with global tech spending slowing.

More Than Numbers: It’s All About Guidance

TCS doesn’t give exact revenue guidance. So investors rely on body language and tone from their CEO during earnings calls.

Last quarter, the tone was cautious — mentioning global uncertainty and slow client spending. Everyone will now look for any positive signals about FY25. Is the outlook improving? Are deals getting delayed or canceled?

These insights will decide how the market reacts more than the raw numbers.

IT Stocks: Big Slide Since Last Year

Take a look at Nifty IT. Over the past five months, it fell from 46,000 to 31,000 — that’s a drop of nearly 30%!

This massive fall was due to:

Weak global demand
Rising costs
Pressure on profit margins
Slowing deal flow

Technical charts also show a lower top, lower bottom pattern, which usually signals a bearish trend.

💬 “Sell on bounce” is the current strategy being advised by analysts.

📈 TCS & Infosys: Individual Outlook

✅ TCS

Resistance at Rs3350
If it fails to cross this level, it could fall to ₹3000
Charts show a weak trend

✅ Infosys

Below Rs1450, it remains weak
Downside targets around Rs1300
Investors are advised to wait or hedge their positions

📊 TCS FY25 Highlights: $30B Revenue, $39.4B Order Book & Strong Margins | MCap 11,74,467.39 Cr

TCS hits $30B revenue milestone in FY25 with 6% YoY growth 🚀 | Operating margin at 24.3% & $39.4B total contract value shows robust demand.

🔍 Key Takeaways:

– $30B revenue… pic.twitter.com/CRmiecPtAU
— Investor Feed (@_Investor_Feed_) April 10, 2025

🧬 Midcap IT: Once Hot, Now in Trouble

Midcap IT stocks like Coforge, Persistent Systems, and KPIT Tech were once darlings of the market. Why? They promised 30-40% growth and got high valuations.

But now, the growth has slowed down. And since their prices were high due to that expected growth, the fall has been sharper.

💬 “These stocks are falling flat on their face,” experts say.

What Should Investors Do Now?

Stay cautious before jumping into IT stocks.
Wait for clear signs of deal wins or growth returning.
Focus on quality companies with strong domestic business.
Avoid blindly buying into a falling market — use pullbacks or SIP-style buying if bullish long-term.

The Changing Job Market and Its Impact on the Economy and Stock Market

Final Thoughts: Is There Light Ahead?

The global tech landscape is changing. Companies in the US and Europe are cutting costs, and large IT outsourcing deals are being delayed.

TCS and Infosys remain strong names, but even they are not immune to slowdowns. Midcap IT will stay under pressure unless growth returns.

So the big question is:
➡️ Will FY25 be better than FY24?

We’ll know more tomorrow — not just through numbers, but through the tone, clarity, and confidence shown in the TCS earnings call.

What’s Your View?

Are you holding IT stocks or planning to buy the dip?
Let us know in the comments.
And don’t forget to subscribe for more such simple breakdowns of complex market news.

Related Topics:earnings season Indian IT stocks Infosys outlook IT sector future midcap IT Nifty IT Q4 stock market news tariff impact on IT TCS

Don't Miss

The Impact of AI on the Indian IT Sector: Threat or Opportunity?

Click to comment

IT

The Impact of AI on the Indian IT Sector: Threat or Opportunity?

Published

4 weeks ago

March 21, 2025

user

Artificial Intelligence (AI) is one of the most revolutionary technologies of our time, reshaping industries and redefining job roles. A McKenzie report estimates that nearly 60-70% of tasks performed by IT professionals in India could be automated using AI and other emerging technologies. Nvidia’s CEO, Jensen Huang, has also highlighted that AI tools like ChatGPT, Gemini, and Co-Pilot are becoming so advanced in code generation that traditional programming skills may soon be redundant. While AI presents immense opportunities, it also raises concerns about job losses and its impact on the Indian IT sector.

A Brief History of the Indian IT Sector

The Indian IT sector emerged in the early 1980s with the rise of companies like TCS, Wipro, and Infosys. By the 2000s, India had positioned itself as a global IT outsourcing hub due to its skilled workforce and cost-effective service models. IT firms adopted a global delivery model, offering software development, maintenance, and testing services remotely. The cost advantages were significant—software development in India is 4-5 times cheaper than in the US and Europe, making it the preferred outsourcing destination.

The sector’s exponential growth led to massive job creation, contributing significantly to India’s GDP. In 2023, the Indian IT sector generated $245 billion in revenue, with exports accounting for 79% of the total. Companies like TCS, Infosys, and Wipro witnessed significant revenue and profit growth, creating wealth for investors and securing India’s position as a technology leader.

Current Challenges: AI, Automation, and Global Slowdown

Despite its success, the Indian IT sector is currently facing multiple challenges:

Global Slowdown and Reduced IT Spending:
- The US and European markets, key clients of Indian IT firms, are experiencing economic slowdowns due to inflation and high interest rates.
- Companies are cutting IT budgets, leading to decreased demand for outsourced services.
AI and Automation:
- Low-end IT jobs, such as software testing, data entry, and basic coding, are already being automated.
- A report suggests that 640,000 low-skill service jobs in the IT sector are at risk of automation.
Rising Competition:
- Countries like Vietnam, the Philippines, and Eastern European nations are emerging as low-cost IT talent hubs, increasing competition for India.

What Industry Leaders Are Saying

Indian IT leaders acknowledge AI as a disruptive force but believe it can be leveraged for growth:

HCL CEO Vijay Kumar states that the traditional business model of India’s IT industry is no longer viable due to AI. He emphasizes the need for companies to adopt a “paranoid mindset” to stay relevant.
Infosys CEO Salil Parekh sees AI as an opportunity rather than a threat, predicting a 7-15% productivity boost through AI-driven efficiency.
TCS CEO K. Krithivasan believes AI will not necessarily reduce the workforce but rather shift the focus towards upskilling and new roles.

Investment Perspective: Is the IT Sector Still a Good Bet?

The Nifty IT index has seen a 20% decline in the last three months, similar to previous corrections post-COVID. Historically, these downturns have presented buying opportunities. However, experts suggest waiting for more clarity in quarterly results before making investment decisions.

While AI is a disruptive force, its impact on the Indian IT sector will depend on how well companies adapt. The industry must invest in proprietary AI models, upskill its workforce, and innovate continuously. Job losses in traditional roles may be inevitable, but new opportunities in AI development, cybersecurity, cloud computing, and IT consulting will emerge. AI is unlikely to replace the Indian IT sector; instead, it will augment its capabilities, making it more competitive in the long run.

Final Thoughts: A Balanced Approach

The future of the Indian IT sector lies in innovation and adaptability. Companies that integrate AI into their operations will thrive, while those that fail to evolve will struggle. As history has shown with companies like Blackberry and Nokia, technological stagnation leads to decline. The Indian IT sector must embrace AI, not as a threat, but as a tool for progress.

So, what do you think? Will AI kill the Indian IT sector, or will it open doors to new opportunities? Share your thoughts in the comments below!