The Indian IT services sector is set to kick off its September quarter earnings season, starting with Tata Consultancy Services (TCS). The July-September quarter was marked by subdued discretionary spending, elongated decision-making cycles, and cautious client sentiment amid macroeconomic uncertainty. As a result, IT sector Q2 results are expected to remain muted, with no material change in operating conditions. Analysts expect commentary from IT companies to remain cautious, with mid-tier firms likely to outperform large-cap players.
According to Nuvama Institutional Equities, the coverage universe is expected to report constant currency QoQ growth in the range of -0.5% to +6%. Motilal Oswal Financial Services (MOFSL) expects QoQ CC revenue growth of 0.3-2.4% for large-caps, while mid-caps are projected to post growth between -0.5% and 6.0%. Aggregate revenue for the coverage universe is expected to grow 6.0% YoY, with EBIT and PAT likely to rise 5.2% and 5.5% YoY, respectively.
TCS is expected to report 2.1% QoQ growth in revenue to ₹64,738 crore in Q2FY26, with net profit projected to increase 2.3% QoQ to ₹13,058 crore. Infosys’ revenue is expected to grow 1.8% QoQ in constant currency, while HCL Technologies is expected to deliver 1.5% QoQ revenue growth in CC terms. Wipro’s IT Services revenue is expected to grow 0.1% QoQ in CC terms.
Tier-2 IT companies are expected to deliver stronger growth in Q2, with Coforge leading the pack at 6% QoQ in constant currency. Among ER&D players, growth is likely to remain modest, with L&T Technology Services expected to post 1.5% QoQ growth. In the smallcap segment, Firstsource is expected to deliver a healthy 2.2% QoQ growth in CC terms.
Overall, the IT sector’s Q2 results are expected to be muted, with cautious commentary from companies and mid-tier firms outperforming large-cap players. The sector’s growth is likely to remain slow, with aggregate revenue expected to grow 6.0% YoY. Investors are advised to check with certified experts before making any investment decisions, as the views and recommendations made above are those of individual analysts or broking companies.