India’s leading information technology (IT) services companies are expected to report modest revenue growth for the second quarter of the 2026 financial year, according to a preview by financial services firm Equirus Securities. The report suggests that while the sector remains stable, heightened global economic uncertainty is making corporate clients cautious about their technology spending.
The top six large-cap IT companies, including Tata Consultancy Services (TCS), Infosys, and Wipro, are projected to see constant currency (CC) US dollar sales growth of between zero per cent and 2.1 per cent for the quarter ended September 2025 compared to the previous quarter. LTI Mindtree and Infosys are anticipated to be near the upper end of this range, while Wipro is expected to be at the lower end.
“Increased macro concerns that started in March 2025 have been keeping enterprise clients cautious on incremental tech-led services spend. But, at the same time, demand trends are stable quarter-on-quarter in the second quarter,” the Equirus report noted.
In contrast, several mid-cap firms are forecast to deliver healthier growth. Companies including Coforge, Persistent Systems, R Systems and eClerx are expected to see CC sales growth ranging from 3.6 per cent to 5.8 per cent quarter-on-quarter.
The research house expects most large-cap companies to show a slight improvement in growth rates from the first quarter, aided by the conversion of recently won cost-saving deals into revenue. Profitability is also likely to be supported by a tailwind from the depreciation of the Indian rupee against the US dollar, which fell by nearly three per cent on average during the quarter.
Despite this, sector valuations are predicted to remain range-bound in the near to medium term. Equirus attributes this to a volatile macroeconomic environment, potential client pressure to share productivity gains from artificial intelligence (AI), and investor caution over potential changes to US outsourcing and visa rules.
The report also highlighted that Infosys might narrow its full-year sales growth guidance to two to three per cent in constant currency terms, from its current one to three per cent band, while maintaining its operating margin guidance. For HCL Technologies, the growth guidance of three to five per cent is expected to remain unchanged.
Equirus Securities recommends that investors remain selective, favouring Infosys and Tech Mahindra among large caps and Mphasis, Zensar, KPIT and eClerx among mid-cap stocks.
“We expect demand commentary to remain cautious unless some certainty relating to tariff-related issues emerges ahead,” the report stated, adding that management commentary on deal pipelines and client decision-making will be key points to watch. |
