Analysts expect Indian IT firms to post muted Q2 FY26 results amid weak global demand, cautious client spending, and policy-related headwinds
The Nifty Information Technology (IT) index rose 1.4% on Monday, with all ten constituent stocks advancing ahead of the July–September (Q2 FY26) earnings season. The rebound came after weeks of weakness as investors positioned ahead of sector commentary expected to address policy risks, visa changes, and muted global demand.
Tata Consultancy Services (TCS) is set to kick off the earnings for the second quarter on October 9.
At the time of writing, Tata Consultancy Services (TCS) was up 0.34% at ₹3,116.55, Infosys gained 0.23% to ₹1,576.94, Persistent Systems edged 0.15% higher to ₹5,198, and HCL Technologies added 0.13% to ₹1,444.50.
IT Sector: Another Weak Quarter Likely
SEBI-registered investment advisor TrueNorth Capital said Indian IT companies are heading into a third consecutive year of single-digit growth, with Q2 FY26 expected to remain subdued.
It projected constant currency revenue growth of 0.5–1.5% sequentially, with HCL Technologies likely to outperform its peers, including Tata Consultancy Services (TCS), Infosys, Wipro, LTIMindtree, and Tech Mahindra.
TrueNorth Capital highlighted that cautious enterprise spending and delayed decision-making by U.S. clients continue to weigh on growth. The banking, financial services, and insurance (BFSI) segment remains steady, while manufacturing, retail, and healthcare are under pressure.
The firm noted that companies are caught in a “window of indecision” as clients hesitate on new tech investments.
The advisory firm said the newly proposed $100,000 H-1B visa fee and the Hire American, Invest American (HIRE) Act will be key issues in management commentary. It added that the sector’s ongoing transition to artificial intelligence (AI) and generative AI remains in an early phase, with revenue benefits still years away.
Brokerages Stay Cautious On Growth And Margins
Brokerages HDFC Securities and Nomura also expect a soft Q2 FY26 for Indian IT companies, citing persistent global macro uncertainty, weak discretionary spending, and pricing pressure.
HDFC Securities said deal momentum improved late in the quarter, with projects in cost optimization, infrastructure modernization, and AI-led initiatives driving activity.
It expects Infosys and LTIMindtree to post up to 1.8% sequential growth in constant currency, while peers remain flat. Infosys and HCLTech are expected to retain their full-year growth guidance of 1–3% and 3–5%, respectively.
Nomura projects modest growth for large—cap companies, including TCS (0.2%), Infosys (1.4%), HCLTech (1.2%), Wipro (0.2%), Tech Mahindra (0.7%), and LTIMindtree (2.2%), as well as better traction among mid-tier firms such as Coforge and Persistent Systems.
It expects Infosys and HCLTech to maintain stable earnings before interest and tax (EBIT) margin bands of 20–22% and 17–18%, respectively, and anticipates that BFSI demand will hold up despite policy uncertainty.
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