The Indian IT sector is heading into the Q4FY26 result announcement with a mixed set of developments. While the rupee depreciation may help profitability, heightened AI disruption fear and ongoing escalation of violence across West Asia added to the concerns. Most industry observers are anticipating a muted Q4 ahead.
Tata Consultancy Services (TCS) will kick start the earnings season on April 9 followed by Wipro, which is scheduled to announce its Q4 on April 16. HCLTech will announce their Q4FY26 on April 21. Tech Mahindra and Infosys will also announce their fourth quarter earnings in the same month on April 22 and April 23.
IT Q4 earnings preview: Nuvama expects Tier-2 IT companies to outperform
Nuvama Institutional Equities, which remains bullish on all top 10 IT firms, expects the sector to report a muted performance. “Most companies under our coverage are likely to post muted sequential growth, but largely in-line with expectations,” Nuvama Institutional Equities noted.
The brokerage estimates Tier-2 companies to continue to outperform their Tier-1 counterparts.
Among large IT companies, TCS is expected to lead with around 1.2% growth, followed by Wipro at 0.5%, while Tech Mahindra may see flat growth. Infosys and HCL Tech are likely to report a decline due to seasonal factors.
Mid-sized IT companies are expected to outperform, led by Persistent, Mphasis, Coforge, and LTIM, while Hexaware may see a slight dip.
On the Gen AI fear Nuvama said, “IT Services model is here to stay and the Gen AI disruption would only lead to bigger opportunities for them.”
IT Q4 earnings preview: Anand Rathi expects LTM to lead large IT firms
Anand Rathi also expects the IT sector to post muted revenue growth, with mid-sized IT firms likely to see slightly higher growth of about 1.5%, compared to around 0.2% sequential growth in constant currency terms for large IT companies. In terms of demad Anand Rathi noted that “Q4FY26 saw no change in the demand environment vs Q3FY26”.
“Margins to benefit from rupee depreciation of 2.6% quarter-on-quarter(QoQ). While we expect Top-6 median EBIT margins to improve to 17.4% (vs. 17.3% in Q3FY26), within mid-caps, median EBIT margins may remain flat at 15.1%,” Anand Rathi noted.
Anand Rathi expects LTM to lead the growth among large-cap companies with about 1.4% sequential constant currency expansion, although this is still below expectations. It expects TCS to post around 1% growth, while Wipro could see a modest rise by 0.5% supported by acquisitions.
Infosys and HCLTech are likely to report a seasonally weak quarter, with revenues expected to decline marginally on a sequential basis. Infosys margins are estimated at around 21%, while HCLTech margins may come under pressure due to wage hikes and restructuring charges.
IT Q4 earnings preview: Nomura sees limited impact from Middle East
In terms of the other factors impacting the tech sector, Nomura expects limited negative impact from the ongoing Middle East conflict.
“We believe continued depreciation of the Rupee vs the dollar will likely aid in some margin
improvement for the sector. However, we expect a significant portion of the currency benefit is either likely to be passed onto the customers in renewals or invested into AI initiatives of the companies,” Nomura said for the IT sector.
On AI-related opportunities Nomura believes IT services companies will remain relevant in the AI world given the tech complexity at the clients’ end. “We think clients are gradually moving from proof-of-concept projects to standalone implementations of AI. Bigger revenue pools for India IT service providers should emerge when enterprise adoption of AI happens,” Nomura noted.