Leading IT stocks ended Thursday’s trade close to their respective 52-week lows with investors showing limited interest in their March 2026 quarter performance, and future growth prospects for the sector.
Infosys declared its March 2026 quarter results with its revenues from operations showing a decline of 1.3% on a constant currency basis on a quarter-on-quarter (q-o-q) basis to Rs 46,402 crore.
Also, Infosys has lowered its growth forecast – its growth forecast of 1.5%-3.5% in constant currency for FY27 will dampen investor sentiment. In January 2026, Infosys had provided for a marginally better guidance – it had provided for a revenue growth guidance of 3%-3.5% in constant currency for FY26.
The broad theme of leading IT results in the March 2026 quarter is that the Middle East crisis along with the expanding role of AI has dampened the growth prospects of the sector.
Performance in the March 2026 quarter
Growth in Revenue (constant currency) in March 2026 quarter
| IT Company | Q-o-Q in the March 2026 quarter |
| Infosys | -1.3% |
| Tech Mahindra | 0.6% |
| HCL Tech | -3.3% |
Infosys reported adecline of 1.3% in its revenues from operations on a constant currency basis on a quarter-on-quarter (q-o-q) basis to Rs 46,402 crore in the March 2026 quarter. The performance in Q4FY26 was well below the December 2025 quarter.
In the December 2025 quarter, Infosys reported a growth of 0.6% on a constant currency basis on a quarter-on-quarter basis in its revenues to Rs 45,479 crore.
Several factors are responsible for its disappointing performance in the March 2026 quarter. No doubt, its key financial vertical, accounted for 28.4% of its total revenues in Q4FY26 as against 28.2% in the December 2025 quarter.
However, in verticals like manufacturing, it accounted for 15.9% of its total revenues in Q4FY26 as against 16.7% in the December 2025 quarter. Also, Infosys’ communication vertical, accounted for 11.7% of its total revenues in the March 2026 quarter as against 12.1% in the December 2025 quarter.
Earlier, Tech Mahindra grew its revenue (constant currency basis) by 0.6 % q-o-q in the March 2026 quarter to Rs 15,076 crore, and that was slower than the growth it reported in Q3FY26.
And HCL Tech had highlighted that its constant currency revenues was negative 3.3% q-o-q to Rs 33,981 crore in the March 2026 quarter. HCL Tech’s performance in Q4FY26 was much worse that what it reported in the December 2025 quarter.
The third and fourth quarters of a financial year are typically seasonally weak quarters for IT companies. In the March quarter, clients in US and Europe are often still deciding the size of IT budgets for the calendar year, and which projects they will focus on.
The Cost Efficiency Play: Why Profits Surged Despite Revenue Dips
Infosys’ core operating profit margin grew 70 basis points q-o-q to 24.1% in the March 2026 quarter. Infosys’ employee expenses were 53.2% of revenues in Q4FY26 as against 53% of revenues in the December 2025 quarter.
However, cost of technical sub-contractors was 8.5% of total revenues in the March 2026 quarter as against 9% in the December 2025 quarter.
Infosys’ net profit rose 27.6% q-o-q to Rs 8,509 crore in the March quarter thanks to a tight check on operating costs coupled with low base effect in the December 2025 quarter.
In the December 2025 quarter, Infosys had a one-time cost of Rs 1,289 crore related to the new labour code.
Earlier, Tech Mahindra also grew its operating profit margin 60 basis points q-o-q to 17% in the March 2026 quarter, and that was owing to a tight check on its key employee costs. Its total employee head count fell by 1,993 q-o-q in Q4FY26.
As a result, its employee costs at 51.7% of total revenues in the March 2026 quarter as against 52.5% in the December 2025 quarter.
A tight check on operating costs coupled with a low base effect helped Tech Mahindra’s net profit rise 21.3% q-o-q to Rs 1,356.4 crore in the March 2026 quarter. It had faced a one-time cost of Rs 272.4 crore in the December 2025 quarter related to the new employee code.
However, HCL Tech’s core operating margin declined 220 basis points q-o-q to 19.5% in the March 2026 quarter. The key cost, employee expenses, were 57% of its consolidated revenues in the March 2026 quarter as compared to 55.7% in the December 2025 quarter.
The company added nearly 802 employees q-o-q in the March 2026 quarter.
Future orders – New deal wins
With regards to future growth opportunities, Infosys’ TCV (new deal wins) was $ 3.2 billion in the March 2026 quarter as against $ 4.8 billion in the December 2025 quarter.
Tech Mahindra’s TCV (new deal wins) was $ 1.07 billion in the March 2026 quarter as against $ 1.1 billion in the December 2025 quarter.
HCL Tech’s TCV (new deal wins) was at $ 1.93 billion in the March 2026 quarter as against $3 billion in the December 2025 quarter.
The Street will be keeping a close eye on these new deal wins how quickly they will translate into revenue for IT companies over the next few quarters.
The Talent War – divergent trends for the long-term
Infosys had 323,578 employees in the March 2026 quarter as against 337,034 employees in the December 2025 quarter.
Similarly, Tech Mahindra’s total head count was 147,623 in the March 2026 quarter as against 149,616 employees in the December 2025 quarter
In contrast, HCL Tech’s head count was 227,181 in the March 2026 quarter as against 226,379 in the December 2025 quarter.
The AI Frontier: HCL Tech Leads Disclosure but Growth Slows
Infosys and Tech Mahindra have not specifically provided information on AI-related revenues in Q4FY26. These two companies have highlighted several AI projects that they have won in the quarter under review and currently implementing on a global scale.
For HCL Tech, its growth in AI-revenues was fairly lacklustre – its Advanced AI Revenue at $155 million (nearly Rs 1,426 crore), a growth of 6.1% in constant currency terms on a q-o-q basis in the March 2026 quarter.
Globally, AI is driving growth in the IT sector and investors will also be monitoring AI-revenue growth for Tech Mahindra and other Indian IT service companies.
Growth forecast – A Glimpse into FY27
Infosys has lowered its growth forecast – its growth forecast of 1.5%-3.5% in constant currency for FY27 will dampen investor sentiment. In January 2026, Infosys had provided for a marginally better guidance – it has provided a revenue growth guidance of 3%-3.5% in constant currency for FY26.
Tech Mahindra has not provided a specific growth forecast for FY27.
Earlier,HCL Tech has guided for slower growth in FY27 – it expects services revenue growth to be between 1.5% – 4.5% y-o-y in constant currency terms for FY27.
In contrast,HCL Tech while declaring its Q3 FY26 results in January 2026 said it expected its services revenue growth to be between 4.75%-5.25 % y-o-y in constant currency for FY26
Priced for Pessimism? Decoding the 52-Week Low Signal
Are IT stock pricing in the poor results?
| Name of IT Company | Consolidated P/E |
| Infosys | 17.5 |
| Tech Mahindra | 27.8 |
| HCL Tech | 19.9 |
Infosys’ quarterly results were declared after the close of Thursday trade. Infosys ended Thursday’s trade with a 2% fall to Rs 1,242.6, and the stock is hovering above its 52-week low of Rs 1,215.2 that was reached on 17 March, 2026.
Infosys trades at a consolidated P/E of 17.5.
Tech Mahindra trades at a consolidated P/E of 27.8 times.
HCL Tech trades at a consolidated P/E of 19.9 times.
Infosys trades with the lowest valuations, and investors could put the stock on their watchlist for 2026, and see if the company performs as per expectations.
Disclaimer:
Amriteshwar Mathur is a financial journalist with over 20 years of experience.
Disclosure: The writer and his family have no shareholding in any of the stocks mentioned in the article.
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