TCS Q4 Earnings: IT Sector Sentiment Turns Bullish

TCS Q4 Results Set the Tone for India's IT Season [TCS](/stock/TCS) reports Q4 FY25 earnings after market hours today, and the positioning shift is already visible. Short interest in the stock has dropped noticeably over the past two weeks, with traders initiating fresh long positions. The reasons aren't hard to find: TCS is trading at roughly 24x forward earnings, a level not seen since early 2020, and the RSI had dipped below 42 before this week's recovery. Whether that's genuine value or a value trap depends entirely on what management says about US client spending. That's the uncomfortable question nobody wants to ask out loud. India's IT majors have spent months talking up AI-related deal wins, but the actual revenue from those engagements remains thin. Analysts at Kotak and Emkay are pencilling in TCS revenue growth of around 4.5-5% in constant currency for Q4. Margins are expected to hold near 24.5%. Those are reasonable, not exciting, numbers. A beat on either line — or better yet, an upgrade to FY26 guidance — is what would actually move the stock. Sector Ripple Effect: INFY, WIPRO, HCLTECH in Focus Here's the dynamic that makes today's print matter beyond just [TCS](/stock/TCS). The IT sector trades as a bloc more than almost any other in Indian equities. When TCS surprised positively in Q2 FY24, [Infosys](/stock/INFY) added 3.2% the next session and [HCL Technologies](/stock/HCLTECH) gained 2.8%, even before either company had reported. The correlation is real and it's tight. NSE: INFY is the most sensitive read-across. Infosys reports next week, and the stock is already pricing in a cautious outcome — it's down about 18% from its 52-week high. A strong TCS commentary on BFSI deal momentum or a pickup in European discretionary spending could reset that overhang fast. NSE: WIPRO and NSE: TECHM are the higher-beta plays in that scenario; both have underperformed TCS year-to-date by 6-8 percentage points, meaning they have more ground to recover if sent...