India’s top IT companies are set to kick off the earnings season for the first quarter of FY26 with cautious expectations. As global tech spending remains under pressure due to economic challenges in the US and Europe, analysts predict a mixed performance in Q1.
While deal pipelines are strong and commentary points to some stability, the lingering macro headwinds are likely to weigh on overall growth. Most companies are expected to report flat or marginal revenue changes, with a few players showing signs of a potential turnaround later in the year.
TCS Q1 on July 10: Experts predict weak earnings despite steady deal wins
Tata Consultancy Services (TCS) is scheduled to release its Q1 earnings for this financial year on July 10.
Kotak is expecting 0.4 per cent revenue decline in constant currency terms. The drop is mainly due to reduced revenues from the BSNL deal. Growth in developed markets is expected to remain tepid at 0.3 per cent.
While TCS continues to win deals worth $8–9 billion, these aren’t translating into meaningful revenue growth. HSBC noted that TCS is facing challenges in its international business and expects EBIT margins to remain flat, even with the deferral of annual wage hikes.
According to Kotak, the focus will be on, “The reasons for struggle for growth in the international business despite strong deal wins.”
HSBC has trimmed its FY25–27 revenue CAGR estimate for TCS to 4 per cent (from 5 per cent earlier) and cut its target price to Rs 3,665. “We also see only moderate improvement in margins,” said HSBC analyst.
In the previous quarter (Q4FY25), TCS posted a consolidated net profit of Rs 12,224 crore in Q4 FY25, a 1.7 per cent drop from Rs 12,434 crore a year ago.
HCLTech Q1 on July 14: Stable outlook despite short-term softness
Another major IT firm, HCLTech will release its first Quarter earnings reports on July 14. HCLTech may see a 0.8 per cent revenue decline in Q1, with softness in both IT services and product segments. However, currency gains may offer some cushion. EBIT margins are expected to dip by 60 basis points quarter-on-quarter, according to Kotak.
Despite the weak quarter, deal wins remain strong at US$2–2.5 billion, and HCLTech is likely to retain its full-year guidance of 2–5 per cent revenue growth and 18–19 per cent margins.
HSBC also highlighted that while HCLTech is gaining ground in ADM (application development and maintenance), valuation multiples have caught up. The stock is now trading at a PE multiple similar to TCS, leaving little headroom for further re-rating.
In the previous quarter(Q4) of fiscal year 2025, HCLTech finished Q4 FY25 strong, posting a net profit of Rs 4,307 crore, up 8 per cent year-on-year, while revenue rose 6.1 per cent to Rs 30,246 crore.
Infosys Q1 on July 23: Muted Q1 but room for optimism
Infosys will release its Q1FY26 results on July 23. Kotak is expecting Infosys to report 1.6 per cent sequential revenue growth, supported by more billing days and steady performance in its financial services vertical. According to the Kotak report, margins are likely to remain stable. The brokerage also expects the company to revise its FY26 revenue guidance upward to 1–3 per cent from the earlier 0–3 per cent range.
HSBC sees Q1 as weak for Infosys but believes the outlook is improving. “Over the past two years, Infosys has faced multiple headwinds such as senior management exits and deal losses. We believe those are now largely behind it,” said Yogesh Aggarwal, analyst at HSBC.
Infosys reported a net profit of Rs 7,033 crore in Q4 FY25, marking an 11.7 per cent year‑on‑year decline as selling and marketing expenses rose. While revenue grew 7.9 per cent to Rs 40,925 crore, it fell slightly short of street expectations
Wipro: Earnings pressure continues
Wipro is yet to announce the date to release its Q1 earnings for FY26. Kotak has forecasted a 2.7 per cent revenue drop in Q1FY26. The decline is attributed to company-specific issues in Europe and weak discretionary spending. The report highlights that margins are likely to remain stable due to aggressive cost controls.
Kotak expects Wipro to issue another soft revenue guidance for Q2FY26, likely flat. Large deal wins may come in at $1.2–1.3 billion.
HSBC on the other hand remains cautious on the stock’s near-term potential. “While we see limited downside at current levels, the company’s turnaround will take more time to reflect in earnings,” said Aggarwal of HSBC.
Wipro’s Q4 FY25 results disappointed markets. The company reported a marginal 0.8% sequential drop in constant-currency revenue to US$2.6 billion, below both Street expectations and its own guidance range. Despite this, operating margins held steady at 17.5%, supported by aggressive cost controls and currency gains.
Outlook: FY26 off to a slow start, recovery expected in FY27
Both HSBC and Kotak agree that FY26 is shaping up to be another year of slow growth for the sector. HSBC has maintained its medium-term sector growth estimate at 4–5 per cent CAGR, with the real recovery expected only in FY27, aided by a low base and stabilising macro conditions.
Kotak remains optimistic about select stocks such as Infosys, Hexaware, Coforge, and Indegene, citing strong deal pipelines and better execution among mid-tier players.