India’s large-cap IT companies have reported better-than-expected results for Q2FY26 despite US tariff, H-1B visa fee hike and other headwinds. Anand Rathi highlighted all top six IT majors — TCS, Infosys, HCLTech, Wipro, Tech Mahindra, and LTIMindtree — reported sequential revenue growth in constant currency terms, strong order bookings and sequential improvement in margins.
Margin growth across large-cap IT firms
LTI Mindtree and HCLTech led the pack with 2.4% growth each, followed by Infosys at 2.2%, Tech Mahindra at 1.6%, TCS at 0.8% and Wipro at 0.3%. The brokerage highlight that margins improved sequentially, helped by the rupee’s 3% depreciation and higher offshore mix.
Margins improved across major players, with LTIMindtree reporting a 156-basis-point expansion and HCLTech improving by 109 bps. Infosys’ EBIT margin rose to 21%, while TCS continued to lead with an industry-best 25.2%.
Anand Rathi on IT sector: AI-led deals to fuel Indian IT’s next phase
The report noted that enterprise adoption of artificial intelligence has moved beyond pilot projects to monetization. Infosys’ AI stack, Services.AI and Client.AI, has scaled significantly, with “40-50% productivity gains” on select workflows.
HCLTech became the first Indian IT company to disclose over $100 million in advanced AI revenue, accounting for nearly 3% of its quarterly revenue across 47 client accounts.
LTIMindtree’s BlueVerse platform, which integrates AI across large client engagements, has also gained traction.
“We see long-term tailwinds for Indian IT from rising AI-led deal wins, incoming Enterprise AI investment cycle and renewed modernization and discretionary spending after a three-year lull. Proven resilience across past tech transitions provide us future comfort,” the report noted.
Deal momentum steady across IT majors
TCS reported stable growth with total contract value (TCV) of $10 billion, while Infosys signed deals worth $3.1 billion, including the $1.6-billion NHS contract in the UK. Wipro reported $4.7 billion in TCV, HCLTech $2.6 billion, LTIMindtree $1.6 billion and Tech Mahindra $0.8 billion.
Anand Rathi on IT sector: Hiring turns mildly positive; attrition eases
Hiring remained cautious but positive during the quarter. Infosys added about 8,000 employees, Wipro 2,300, and HCLTech also added 5,196 freshers during the quarter.
“Attrition eased, indicating tighter deployment,” the report said. No other IT company flag material job cuts expect TCS which reported a restructuring exercise impacting approx 1% of its workforce (~6,000 employees), incurring an Rs 11 billion expense—equivalent to 1.7% of revenues—for Q2FY26. The company also noted that further actions and restructuring charges expected over the next two quarters.
The report added that new US H-1B visa rules are unlikely to have a major impact on Indian IT firms as they are focusing on localisation and nearshore delivery centres. Wipro and Tech Mahindra said over 80% of their workforce already localized or nearshore.
Large deal ramp-ups to drive H2 recovery
Infosys raised its FY26 constant currency growth guidance to 2–3%, while HCLTech increased its IT services revenue growth range to 4–5%. Wipro projected a Q3 growth of up to 1.5%, and LTIMindtree guided for sequential improvement in the second half of the year, supported by large deal ramp-ups.
Anand Rathi bullish on LTIMindtree, Infosys, HCLTech
Anand Rathi maintained a positive view on the sector, with LTIMindtree, Infosys, and HCLTech as its top picks. It values large-cap IT stocks at an average of 20.8 times FY27 estimated earnings, with an expected 8.2% CAGR in earnings between FY26 and FY28.