Investors were looking for clear signs of a revival in the performance of IT companies in the June 2026 quarter following Tech Mahindra’s results last week.
However, Infosys after the close of Thursday trading reported a lacklustre 1% quarter-on-quarter (q-o-q) growth in constant currency terms of its consolidated revenues to Rs 48,211 crore in the June 2026 quarter.
Sluggish growth could be partly attributed to lacklustre performance in certain verticals — its key financial services vertical accounted for 27.9% of total revenues in the June 2026 quarter as compared to 28% in the March 2026 quarter.
Also, communication vertical accounted for 12% of its total revenues in June 2026 quarter as compared to 12.4% in the March 2026 quarter.
One of the standout features of Infosys’ June 2026 quarter results was that 8.2% of its revenues was derived from AI-related work. The company has not provided a comparative figure.
Infosys ended flat on Thursday to Rs 1,052.6, and the stock is hovering above its 52-week low of Rs 984 that was reached on 1 July, 2026.
Infosys’s results highlight the bearish investor sentiment prevailing for the broader IT sector – the Nifty IT index has dropped nearly 25% in the current calendar year as compared to a 9% fall in the broader Nifty50.
Constant Currency Growth: Tech Mahindra stays ahead of peers in June 2026 quarter
Earlier, Tech Mahindra reported a 2.6% quarter-on-quarter (q-o-q) growth on constant currency terms in consolidated revenues to Rs 15,711.9 crore in the June 2026 quarter. The growth in revenues reported by Tech Mahindra in June 2026 quarter has given some signs of an upturn in growth in IT services to investors on Dalal Street.
The company benefited from strong growth in certain verticals – for instance, manufacturing accounted for 19.3% of its revenues in the June 2026 quarter, a growth of 9% q-o-q, according to its investor presentation.
Similarly, BFSI segment accounted for 16.7% of Tech Mahindra’s revenues in June 2026 quarter, a growth of 2.7% q-o-q.
Growth Diverges (Constant Currency)
| Name of IT company | Q-o-Q growth in the June 2026 quarter |
| Infosys | 1% |
| Tech Mahindra | 2.6% |
| HCL Tech | -0.5% |
And HCL Tech reported its consolidated revenues declined by 0.5% q-o-q in constant currency terms to Rs 34,579 crore in the June 2026 quarter.
In its key IT services division, HCL Tech has highlighted revenues declined 0.7% q-o-q in constant currency.
In certain verticals the company has faced a difficult operating environment – for instance, telecommunications, media, publishing and entertainment accounted for 11.2% of revenues in the June 2026 quarter as against 12.1% in the March 2026 quarter.
Operating margins: A higher cost structure hurts Infosys in June 2026 quarter
Infosys’ core operating profit margin shrank 40 basis points q-o-q to 23.7% in the June 2026 quarter. Its key employee costs were under tight control with the company’s total workforce shrinking by 532 employees q-o-q in the June 2026 quarter. Infosys’ employee expenses were 52.5% of revenues in June 2026 quarter as against 53.2% of revenues in the March 2026 quarter.
However, cost of technical sub-contractors was 8.7% in the June 2026 quarter as compared to 8.5% in the March 2026 quarter.
A higher cost structure resulted in Infosys’ net profit shrinking nearly 8.6% q-o-q to Rs 7,775 crore in the June 2026 quarter.
Earlier, Tech Mahindra benefited from improved revenue growth q-o-q on a constant currency basis in the June 2026 quarter along with a reduction of 863 employees q-o-q in its total workforce. As a result, Tech Mahindra’s core operating profit margin grew by nearly 50 basis points q-o-q to 17.5% in the quarter under review.
Its key employee costs were at 50.1% of revenue from operations in the June 2026 quarter as against 51.7% in the March 2026 quarter, helped by a reduction in its total workforce.
And improved growth along with staff reductions helped Tech Mahindra’s net profit grow nearly 9.6% q-o-q to Rs 1,486.3 crore in the June 2026 quarter.
And HCL Tech’s operating profit margin rose 20 basis points q-o-q to 19.9% in the June 2026 quarter. HCL Tech had also reduced its workforce by 3,292 employees q-o-q in the June 2026 quarter.
As a result, the key cost, employee expenses, were 56.9% of its consolidated revenues in the June 2026 quarter as compared to 57% in the March 2026 quarter.
A tight check on costs helped HCL Tech’s net profit rise 3% q-o-q to Rs 4,626 crore in the June 2026 quarter
The AI Lifeline: AI is a key revenue for Infosys
Infosys has highlighted 8.2% of its revenues was derived from AI-related activities. It has not provided a comparative figure.
Tech Mahindra has not specifically provided information on AI-related revenues in Q1FY27.
Earlier, HCL Tech’s Advanced AI revenues were $ 171 million (nearly Rs 1,625 crore) in the June 2026 quarter, a growth of 10.6% q-o-q on a constant currency basis.
Workforce: Infosys, Tech Mahindra and HCL Tech shrink workforce q-o-q
Infosys had 328,062 employees in the June 2026 quarter as against 328,594 employees in the March 2026 quarter.
Earlier, Tech Mahindra highlighted its total employee head count was 146,760 in the June 2026 quarter as compared to 147,623 in the March 2026 quarter.
And HCL Tech has highlighted its employee head count was 223,889 in the June 2026 quarter as compared to 227,181 in the March 2026 quarter.
The TCV Divide: Infosys and HCL Tech march ahead
With regards to future growth opportunities, Infosys’ TCV (new deal wins) was $ 3.6 billion in the June 2026 quarter as compared to $ 3.2 billion in the March 2026 quarter.
Similarly, HCL Tech’s new deal wins were $ 2.4 billion in the June 2026 quarter as against $1.93 billion in the March 2026 quarter, a strong growth of 24.4% q-o-q.
However, Tech Mahindra’s TCV (new deal wins) were $1.07 billion in the June 2026 quarter and broadly flat on a q-o-q basis.
FY27 Guidance: Infosys’ trims growth forecast
Infosys has trimmed its growth forecast – its growthforecast of 1.5%-3% in constant currency for FY27 will dampen investor sentiment
In April 2026, while declaring its March 2026 quarter results, Infosys had given a growth forecast of 1.5%-3.5% in constant currency for FY27.
Earlier, HCL Tech has kept its growth forecast constant – it expects the key Services revenue to grow 1.5% to 4.5% y-o-y on a constant currency basis during FY27.
And Tech Mahindra has not provided a specific growth forecast for FY27.
The Valuation Gap: Tech Mahindra has premium valuations for its growth path
Infosys’ results were declared after the close of Thursday trade. However, Infosys ended flat on Thursday to Rs 1,052.6, and the stock is hovering above its 52-week low of Rs 984 that was reached on 1 July, 2026.
Here’s a look at the valuations of key IT services companies.
| Name of IT Company | Consolidated P/E |
| Infosys | 14 times |
| Tech Mahindra | 28.9 times |
| HCL Tech | 18.6 |
Infosys trades at a consolidated P/E of 14.1 times, and over the 5 years, it has traded at a P/E between 14 times and 38.4 times.
Meanwhile, Tech Mahindra trades at a consolidated P/E of 28.9 times, and over the past 5 years, it has traded at a P/E between 17 times and 65.5 times.
And HCL Tech trades at a consolidated P/E of 18.6 times, and over the past 5 years, the stock has traded between 17.2 times and 33 times.
Only Tech Mahindra had shown signs of revival in its performance in the June 2026 quarter.
The IT services sector is poised for a pick-up in revenues, going forward, and readers could put Infosys, HCL Tech and Tech Mahindra to their watch list of stocks for 2026.
Disclaimer:
Amriteshwar Mathur is a financial journalist with over 20 years of experience.
The writer and his family have no shareholding in any of the stocks mentioned in the article.
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