Rs 51,000 crore gone! TCS Q1 sends Infosys, Wipro, TechM, HCL Tech shares falling

Top five IT firms — Tata Consultancy Services (TCS), Infosys,, HCL Technologies, Wipro and Tech Mahindra — lost a combined Rs 51,000 crore in market capitalisation (m-cap) as concerns over challenging demand environment hit investor sentiment. 

TCS’ Q1FY26 revenues declined 3.3 per cent in constant currency (CC) terms sequentially, missing Street estimates by a wide margin. Anlaysts, however suggests the BSNL ramp-down contributed 85 per cent or 2.8 per cent of the decline, explaining majority of the miss.   

Shares of TCS were trading 2.34 per cent lower at Rs 3,303.10 apiece on Friday. Its m-cap ell Rs 27,967.82 crore over Thursday’s Rs 12,23,745 crore.
Infosys declined 1.41 per cent and was trading at Rs 1,594. This stock saw Rs 9,866.40 crore erosion in its m-cap. HCL Technologies Ltd also declined 1.34 per cent to Rs 1,641.10 and lost Rs 6,037.90 crore in m-cap. 
Wipro fell 2.11 per cent to Rs 259.50. TechM was down nearly 1 per cent. These two stocks about Rs 7,200 crore in m-cap. 
 
The TCS management, ICICI Securities noted, mentioned muted spending across all key verticals due to recent policy changes in the US. In BFSI, banking and financial services demand in US and UK seems to be steady, whereas clients are more cautious in Europe. 

“In insurance, softness continues in US geography. CPG & retail vertical continues to face high-cost pressure and supply-chain challenges due to tariffs. In manufacturing, auto vertical has been
significantly impacted by global industry-wide challenges,” ICICI Securities noted. 

Energy and utilities industry is also seeing lower capital investments due to policy changes. 

JM Financial noted that strong deals in the recent past have not translated into growth for TCS, implying weak revenue conversion – a key investor concern. 

The management attributes this to a combination of factors – pauses, rescoping and tenure extension. Decline of $50 million-plus clients by 9 (6 per cent of base) in past four quarters – highest ever – suggests challenge is secular. 

:Client specific, such as Deutsche Bank decline, might be impacting too. Understandably, investors worry that TCS is losing wallet share to competition. We differ though. The panacea for all these – growth, wallet share gains – remains TCV, which TCS continues to win,” JM Financial said.

It believes TCS’ growth should improve once macro uncertainty lifts. This brokerage suggested ‘Buy’ on TCS with a revised target of Rs 3,950.