29 - 04 - 2026

Indian IT Earnings Preview: Muted Q4 Amid Geopolitical Clouds, AI Revival Eyed for 2026

By Our Bureau
March 31, 2026

Indian IT services giants are bracing for a tepid close to fiscal year 2026, with Motilal Oswal Financial Services (MOFSL) forecasting flat-to-modest sequential growth in the January-March quarter due to seasonal furloughs, client caution, and escalating West Asia tensions.

In its latest sector preview dated March 30, MOFSL anticipates large-cap firms like TCS, Infosys, and HCL Tech to post 0.3%-2.3% quarter-on-quarter constant-currency revenue growth, while midcaps could edge higher at 2.5%-3.5%.

Margins face 30-130 basis-point pressure from wage hikes and furloughs, though rupee depreciation offers some cushion. Infosys is tipped to hold its 1%-3% full-year guidance, with Q3 flat and Q4 mildly softer. India’s second largest software exporter acquired Optimum Healthcare IT, a healthcare digital transformation and consulting firm recognized for helping provider organizations drive large-scale transformation.

Demand remains subdued amid US tariff uncertainties, BFSI steadiness offset by retail softness, and macro headwinds from oil spikes tied to Middle East conflicts. “Clients are cautious on large programs,” MOFSL notes, projecting H2FY26 growth as flat QoQ.

Key earnings highlights from the quarter include TCS’s revenue growth of 9.4% year-on-year to ₹59,162 crore and net profit rising 18.5% to ₹11,392 crore. Infosys reported a 7.8% growth in revenue to ₹37,923 crore, with net profit up 12.6% to ₹6,593 crore. Meanwhile, HCL Technologies posted a 6.2% growth in revenue to ₹26,606 crore, with net profit up 10.3% to ₹3,986 crore. Wipro’s revenue grew 3.4% year-on-year to ₹23,803 crore, with net profit rising 5.1% to ₹2,835 crore.

A New Hope

Yet, optimism flickers for calendar 2026 as the “growth cycle bottom,” with AI services poised to accelerate in H2FY27-FY28 via acquisitions and partnerships. MOFSL favors Infosys, Tech Mahindra, Coforge, and Hexaware as top picks, maintaining a “mild overweight” on IT. HCL Tech and TCS earn “buy” nods for AI traction and deal wins, targeting ₹2,150 and ₹4,400 respectively.

The report underscores uneven recovery: largecaps lag on seasonality, midcaps shine on agility. Earnings season kicks off Tuesday, with eyes on CY26 budgeting cues amid tariff and tech-cycle risks. Sector heavyweights close FY26 on guidance, but AI inflection could reignite the bulls. India’s information technology sector delivered a mixed bag of quarterly earnings, with some companies beating expectations while others lagged, according to a report by Motilal Oswal.

The March quarter is expected to see a “mixed performance” from the top-tier IT firms, with Tata Consultancy Services Ltd. (TCS) and Infosys Ltd. posting “broadly in-line” results, while HCL Technologies Ltd. and Wipro Ltd. reported “weak” numbers, Motilal Oswal analysts wrote in a note.

TCS, India’s largest IT services company, reported a 9.4% growth in revenue to ₹59,162 crore ($7.7 billion) for the quarter ended March, beating analysts’ estimates. Net profit rose 18.5% to ₹11,392 crore.

Infosys, the country’s second-largest IT firm, posted a 7.8% growth in revenue to ₹37,923 crore ($4.9 billion), with net profit rising 12.6% to ₹6,593 crore.

However, HCL Technologies reported a 6.2% growth in revenue to ₹26,606 crore ($3.4 billion), missing analysts’ estimates, while Wipro’s revenue grew 3.4% to ₹23,803 crore ($3.1 billion).

The mixed earnings reports reflect the challenges facing India’s $150 billion IT sector, which is grappling with global economic uncertainty, supply chain disruptions, and increasing competition from newer technologies.

Motilal Oswal analysts expect the sector to see a “gradual recovery” in the coming quarters, driven by a rebound in discretionary spending and a continued shift towards digital transformation.