TCS shares dip as analysts offer mixed outlook

IT sector is expected to grow considerably from Q4 FY25 onwards

- SHIVAM TYAGI

Shares of TCS fell 2.73 per cent to ₹4,112.65 apiece on the BSE in Friday's intraday deals after the information technology (IT) company reported modest earnings in the second quarter of the current financial year (Q2FY25).

Analysts believe that the earnings were in line with their estimates and the firm's management is confident of better results in the near future. The confidence is based on a positive demand outlook for IT services and an improved macro environment. They expect TCS and the IT sector to grow considerably from Q4FY25 onwards.

Excluding health care and telecom, other TCS verticals grew sequentially in Q2FY25. Health care declined 3.4 per cent and telecom remained weak, said analysts at Nuvama Institutional Equities.

“Growth was primarily driven by the BSNL ramp-up. The decline in North America was surprising but this was attributable to client-specific issues in health care and persistent weakness in the communications vertical,” said analysts at Motilal Oswal Financial Services, referring to TCS's deal to provide services to the state-run telecom company.