How TCS, Infosys, HCL Tech, Wipro and Tech Mahindra have set the tone for the IT sector | Nifty IT Q2 Review

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Nifty IT Q2 Review: The latest quarterly earnings from Nifty IT heavyweights TCS, Infosys, HCL Technologies, Wipro and Tech Mahindra have provided an early read on the sector's operating trends, with results reflecting mixed performance across revenue growth, margins, deal wins and outlook.

While Tech Mahindra and HCL Technologies delivered stronger operational performance, TCS, Infosys and Wipro largely reported quarters that were in line with expectations. Together, these five companies account for a significant share of the Nifty IT index and are closely tracked for signals on sector momentum.

IT Company	CC Revenue Growth QoQ	Margin Trend	TCV	Key Takeaway
TCS	0.50 per cent	Flat EBIT margin	USD 9.6 bn	In-line quarter; no immediate re-rating trigger
HCL Tech	2.30 per cent	EBIT margin up to 18.2 per cent	USD 3.25 bn	Margin-led beat; FY27 guidance raised
Tech Mahindra	2.40 per cent	EBIT margin up to 14.8 per cent	USD 1.02 bn	Strongest momentum among large-cap peers
Wipro	Flat	EBIT margin up to 16.5 per cent	USD 2.59 bn	In-line quarter; bookings remained soft
Infosys	1.20 per cent	Slightly below estimates	USD 5.2 bn	Strong TCV but FY27 growth guidance cut

TCS: Modest quarter, outlook remains watchpoint

Tata Consultancy Services (TCS) reported CC revenue growth of 0.5 per cent QoQ, in line with estimates. EBIT margins remained flat as wage-hike reversal gains were offset by AI deflation and pricing pressure.

The company reported TCV of USD 9.6 billion, slightly below the estimated USD 10-11 billion range. The figure excluded the Porsche and Best Buy deals.

TCS also flagged Q3 furloughs. Morgan Stanley maintained its Equal Weight rating and target price of Rs 2,200 on the stock.

HCL Tech: Margins drive earnings beat

HCL Technologies reported revenue in line with expectations, while EBIT and PAT exceeded estimates.

CC revenue grew 2.3 per cent QoQ, although slightly below estimates. The company raised its FY27 guidance to 2.5-4 per cent.

EBIT margin expanded by 129-131 basis points QoQ to 18.2 per cent, aided by acquisitions, operating leverage and Advanced AI. TCV stood at USD 3.25 billion, in line with estimates and above USD 2.4 billion reported in Q1.

Morgan Stanley maintained its Equal Weight rating and target price of Rs 1,410.

Tech Mahindra delivers strongest momentum

Tech Mahindra reported what was described as the strongest momentum among large-cap IT peers.

CC revenue grew 2.4 per cent QoQ, ahead of expectations of 1.7 per cent, supported by deal ramp-ups. EBIT margin increased 40 basis points QoQ to 14.8 per cent, marking the 12th consecutive quarter of margin expansion.

The company reported TCV of USD 1.02 billion, exceeding the estimated USD 800 million. It also marked the fourth consecutive quarter with TCV above USD 1 billion.

HDFC Securities maintained its ADD rating with a target price of Rs 1,800.

Wipro reports in-line operations

Wipro reported an operationally in-line quarter, with CC revenue remaining flat QoQ and within guidance amid subdued demand.

EBIT margin rose 50 basis points QoQ to 16.5 per cent, supported by operating leverage and rupee movement. Higher finance costs weighed on PAT.

TCV came in at USD 2.59 billion, marginally below estimates, while large-deal TCV declined 58.6 per cent QoQ.

HDFC Securities maintained its ADD rating and target price of Rs 190.

Infosys sees strong deal wins but cuts growth guidance

Infosys reported CC revenue growth of 1.2 per cent QoQ, below expectations of 1.6 per cent. Margins were slightly below estimates, though the company retained its 20 per cent-22 per cent margin guidance.

The company reported TCV of USD 5.2 billion, well above the estimated USD 3 billion and its second-highest level in five years.

Infosys lowered its FY27 CC growth guidance to 1 per cent-2 per cent from 1.5 per cent-3 per cent, citing offshoring changes and a dropped Europe deal.

Morgan Stanley maintained its Equal Weight rating on the stock.

Conclusion: What Q2 results indicate for Nifty IT

From an overall perspective, the latest earnings from TCS, Infosys, HCL Technologies, Tech Mahindra and Wipro indicate a mixed quarter for India's large-cap IT sector. While Tech Mahindra and HCL Technologies stood out on margins and execution, TCS, Infosys and Wipro largely delivered in-line performances.

Deal activity remained stronger for some players, with Infosys reporting USD 5.2 billion in TCV and Tech Mahindra posting its fourth consecutive quarter with bookings above USD 1 billion. Revenue growth, however, remained modest across most companies, while guidance and outlook commentary varied across the sector. The results from these five Nifty IT constituents provide a snapshot of the operating, margin and deal trends currently shaping the 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.)

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