TCS Share Price In Focus Ahead Of Q3 Results; Margins, BSNL Ramp-Up In Spotlight

Shares of Tata Consultancy Services Ltd. are in focus ahead of its December-quarter earnings, with Bloomberg estimates suggesting that headline growth is masking continued pressure in constant-currency terms due to the lingering impact of the BSNL ramp-down.

While the December quarter is seasonally weak because of fewer billing days, analysts say delays and deferrals have eased compared with earlier periods. The quarter is expected to show improving execution in select verticals, although margins will be shaped by the two-month impact of wage hikes for junior employees, furloughs and restructuring-related expenses.

• Revenue 2% higher at 66,849 crore versus Rs 65,799 crore

• EBIT seen 8% higher at Rs 16,732 crore versus Rs 15,430 crore

• EBIT margin seen expanding to 25.02% versus 23.45%

• Profit seen 8% higher at Rs 13,006 crore versus Rs 12,075 crore

Investec

Investec expects 0.8% quarter-on-quarter growth in constant currency and 0.5% growth in US dollar terms, as delays and deferrals ease and a potential turnaround emerges in the communications, media and entertainment vertical. EBIT margins are expected to be impacted by the two-month wage hike for junior employees, while severance costs are likely to be treated as a one-off below the EBIT line. Q4 could strengthen if the BSNL ramp-up begins and earlier deal closures translate into revenue.

Jefferies

Jefferies forecasts 0.5% quarter-on-quarter constant-currency revenue growth, driven by international markets, with no contribution from the BSNL deal. Margins are expected to rise by 50 basis points, aided by headcount reduction and rupee depreciation, partly offset by wage hikes and furloughs. Deal wins are seen in the $7 billion to $9 billion range, with an exceptional severance-related item of Rs 800 crore expected. Focus areas include BFSI demand, North America and Europe trends, calendar-year 2026 budgets, restructuring impact on margins, BSNL phase-two ramp-up, H-1B visa fees and artificial intelligence adoption.

UBS

UBS expects growth to remain impacted by the BSNL ramp-down. Margins are seen declining slightly due to furloughs, partly offset by rupee depreciation. Deal wins are also expected in the $7 billion to $9 billion range.

Nuvama

Nuvama expects 0.5% quarter-on-quarter constant-currency growth and 0.2% growth in US dollar terms, driven by developed markets as execution on the BSNL extension deal has not started. Margins are likely to decline by about 60 basis points due to the two-month wage hike impact. Key watch points include the US macro outlook and updates on employee restructuring.