IT Sector Preview: The Nifty IT index has slipped nearly 20 per cent over the past three months as investor sentiment remains cautious. Major Indian IT companies are now set to begin reporting their Q4 FY26 results starting tomorrow.
According to Kotak Institutional Equities, the IT services sector is expected to deliver a subdued performance in the fourth quarter of FY26, with analysts forecasting weak sequential growth amid ongoing macroeconomic headwinds.
Despite soft quarter-on-quarter momentum, the industry is likely to see a stable-to-improving year-on-year trajectory, aided in part by currency tailwinds.
Market Overview
Looking ahead, the outlook for FY27 remains cautious. Industry growth is projected in the range of 3–5 per cent, reflecting persistent geopolitical uncertainties and structural shifts within the sector. Generative AI technologies are being seen as a contributing factor to pricing pressures and potential deflation in traditional service lines.
Even so, companies continue to report a healthy deal pipeline, suggesting that long-term demand remains intact.
Sector growth expectations
In Q4 FY26, IT sector growth in organic constant currency terms is expected to remain muted on a sequential basis, with quarter-on-quarter performance ranging between a decline of around 1 per cent and growth of up to 1.5 per cent.
However, on a year-on-year basis, Tier-1 companies are likely to report a low-to-mid single-digit improvement. Overall, the sector trend points to near-term softness in sequential growth, with gradual recovery visible in annual comparisons.
IT company-specific outlook
Kotak Institutional Equities expects mixed Q4 FY26 performance across Tier-1 IT companies:
| Company | QoQ CC Growth | YoY CC Growth |
| TCS | ~ 0.8–1.2% | ~ 0% |
| Infosys | ~ -1.0% | ~ 4–5% |
| HCL Tech | ~ -1.7% | ~ 4.4% |
| Wipro | ~ -0.7% (organic) | ~ 0.9% |
| Tech Mahindra | ~ 0% | ~ 2.1% |
TCS remains marginally positive, while Infosys, HCL Tech, and Wipro decline. Year-on-year trends indicate a modest recovery, led by Infosys and HCL Tech, while other companies remain subdued.
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Q4 FY26 Result Date: TCS will kick off the IT sector’s results cycle by reporting on April 9.
Infosys
Infosys, a Nifty 50 company, is expected to report dull quarter-on-quarter growth due to seasonality. However, it has provided 3–5 per cent growth guidance for FY27. Key factors to watch include the impact of Generative AI, the deal pipeline, and client decision delays.
Q4 FY26 Result Date: Infosys will report results on April 16.
HCLTech
Growth in HCL Tech is expected to be supported by its services segment, partially offset by seasonal weakness in the products business. Margins are likely to be aided by currency tailwinds, with guidance indicating 3–5 per cent growth.
Q4 FY26 Result Date: HCL Tech will report its Q4 results on April 21.
Wipro
Wipro is forecast to underperform its peers, with weak growth guidance of -2 per cent to 0 per cent amid deal delays and pricing pressures. Investor focus remains on turnaround execution and revival in large deal wins.
Q4 FY26 Result Date: Wipro will report results on April 23.
Tech Mahindra’s revenue is expected to remain flat, though deal momentum is improving with a stronger pipeline. Key focus areas include margin expansion, balanced reinvestment, and recovery in the telecom vertical.
Q4 FY26 Result Date: Tech Mahindra will report results on April 22.
| Company | Q4FY26 Performance | Result Date |
| Tata Consultancy Services (TCS) | Marginally positive | April 9 |
| Infosys | Dull QoQ growth | April 16 |
| HCLTech | Supported by services; partially offset by product weakness | April 21 |
| Wipro | Weak growth | April 23 |
| Tech Mahindra | Flat revenue | April 22 |
Top Picks
From an overall perspective, Kotak Institutional Equities identifies TCS, Infosys, Tech Mahindra, and Coforge as the top picks in the IT sector.
(Disclaimer: The above article is meant for informational purposes only, and should not be considered as any investment advice. ET NOW DIGITAL suggests its readers/audience to consult their financial advisors before making any money-related decisions.)
