TCS stock fell 3.5% as earnings miss estimates, salary hikes deferred

Tata Consultancy Services (TCS)’s decision to defer hikes owing to an uncertain business environment and rising costs may have also added to the stock’s dip. TCS reported 6% growth in net profit at ₹12,760 crore over the year-ago period in the quarter ended June 30 of fiscal 2026. Weak revenue in both domestic and global markets was cited as the reason behind the slowdown in profit growth.

Moreover, the management also shelved the decision regarding a salary hike, which usually happens in the June quarter.  “First-quarter salary hikes have never been deferred before in TCS but two of the top five IT firms did defer it last year. This is only for an across-the-board hike. Variable salary is being given to those people who performed well,” said Sandeep Gogia, Managing Director at Equirus.

“I believe what they are waiting for is at least a certainty in this specific point and I think they did allude to that somewhere around the end of July or end of August, where they see that there should be some certainty as far as the tariff things are concerned,” said Sushovon Nayak, Research Analyst, Anand Rathi Institutional Equities. He added that with the current Chief of Human Resources, Milind Lakkad, resigning, they might want to include the new entrant’s input in deciding the salary hike.

Analysts were divided on the probability that other IT companies may follow suit. While some said that that there is an increased probability that other IT companies that are yet to announce their earnings may also follow suit although different companies announce their increments in different quarter, others felt that an uptick in attrition can make wage hikes unavoidable.