Q2 Preview for IT Sector: Impact of Weak INR and H1-B Visa Fees on TCS, Infosys, Wipro, HCL, and Other Tech Firms – Goodreturns
The IT sector in India is set to announce its Q2 results, and several factors are expected to impact the performance of major tech companies such as TCS, Infosys, Wipro, and HCL. Two key factors that will influence the results are the weak Indian rupee (INR) and the increased H1-B visa fees.
A weak INR can have a positive impact on the IT sector, as it makes Indian exports more competitive in the global market. Since the IT sector primarily earns revenue in foreign currencies, a weak INR can lead to higher revenues in rupee terms. This can result in increased profitability for IT companies. However, the benefit of a weak INR may be partially offset by the increased cost of imports, such as software and hardware, which are typically purchased in foreign currencies.
On the other hand, the increased H1-B visa fees are expected to have a negative impact on the IT sector. The US government has increased the fees for H1-B visas, which are commonly used by Indian IT professionals to work in the US. This increase in fees will lead to higher operational costs for IT companies, which may negatively impact their margins. Additionally, the increased fees may also lead to a reduction in the number of H1-B visas issued, which could further exacerbate the issue.
The impact of these factors will vary across different IT companies. Companies with a higher exposure to the US market, such as TCS and Infosys, may be more affected by the increased H1-B visa fees. On the other hand, companies with a more diversified revenue stream, such as HCL, may be less impacted.
In terms of specific companies, TCS is expected to report a revenue growth of 2-3% in Q2, driven by a strong performance in its digital business. Infosys is expected to report a revenue growth of 1-2%, driven by a pickup in its large deal wins. Wipro is expected to report a revenue growth of 1-2%, driven by a strong performance in its BFSI segment. HCL is expected to report a revenue growth of 2-3%, driven by a strong performance in its engineering and R&D services business.
Overall, the Q2 results of the IT sector will be closely watched, as they will provide insight into the impact of the weak INR and increased H1-B visa fees on the sector. While the weak INR is expected to have a positive impact, the increased H1-B visa fees are expected to have a negative impact. The performance of individual companies will depend on their specific exposure to these factors and their ability to adapt to the changing market conditions.
Infosys McCamish Agrees to $17.5 Million Settlement Following Large-Scale Data Breach, Potential Claimants Urged to Verify Eligibility
Infosys McCamish Systems LLC, a US subsidiary of Infosys, has agreed to pay $17.5 million to settle claims related to a 2023 data breach that exposed the personal information of over 3.7 million individuals. The breach, which occurred between October 29 and November 2, 2023, compromised highly sensitive information, including Social Security numbers, medical details, and financial account records. The plaintiffs alleged that Infosys McCamish failed to maintain industry-standard cybersecurity protections, leaving customer information vulnerable to attack.
The settlement covers all individuals whose data was exposed during the breach, including those who received a notification letter. Eligible individuals may be entitled to reimbursement for actual losses, preventive credit monitoring, and residual cash payouts. Victims with documented financial losses can seek reimbursement of up to $6,000, while those without losses can access two years of complimentary credit monitoring. Additionally, all claimants may be eligible for a residual cash payment, currently estimated at $30 but capped at $599 per person.
The claims process is managed by Kroll Settlement Administration LLC, and filing can be done online or by mailing a paper form. The claim submission deadline is December 1, 2025, and the final approval hearing is scheduled for December 18, 2025. The court will make the final decision on settlement approval, and payouts and benefits will only be distributed after approval and resolution of any appeals.
The lawsuit, titled McNally, et al. v. Infosys McCamish Systems LLC, is being heard in the US District Court for the Northern District of Georgia. Class counsel includes attorneys from several law firms, while defense counsel for Infosys McCamish comes from Wilson Sonsini Goodrich & Rosati P.C. The settlement administrator has emphasized that fraudulent claims will harm eligible class members and are prohibited, and claimants are urged to provide accurate information under penalty of perjury.
The data breach has raised broader questions about data safety in the insurance and retirement industries, given McCamish’s partnerships with over 40 major insurance providers. The settlement highlights the importance of maintaining industry-standard cybersecurity protections to prevent such breaches and protect customer information. The case is a reminder that companies have a responsibility to safeguard sensitive information and that individuals have a right to expect their data to be protected.
Q2 2025 IT Sector Earnings Preview: Earnings likely to be impacted by lingering effects of Trump-era tariffs and a sluggish macroeconomic environment, with mid-cap IT companies poised to outshine their larger counterparts.
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.
The IT sector is expected to experience a sluggish growth in FY26, but is anticipated to bounce back strongly in the next fiscal year, driven by the increasing adoption of artificial intelligence: Report
The Indian IT sector is experiencing a period of subdued growth, with industry guidance and recent results indicating a muted outlook for the current fiscal year (FY26). However, a recovery is possible in the next fiscal year (FY27) due to a predicted increase in demand from key export markets and the adoption of new technologies, particularly artificial intelligence (AI). According to HSBC Global Research, while near-term discretionary spending among clients remains weak, there are signs of acceleration in the next fiscal year, driven by the adoption of AI among enterprises.
The Indian IT sector has faced challenges related to global macroeconomic uncertainty, client cost optimization, and delayed decision-making. Despite these challenges, major Indian IT firms such as TCS, Infosys, and HCLTech have reported healthy large deal bookings and strong pipelines in the first quarter of FY26. However, actual revenue growth guidance remains restrained at 1-5% for the year.
Industry analysis highlights AI as the central driver of the next growth cycle for Indian IT services. Management commentary from leading Indian and global IT firms suggests that most client AI projects to date have focused on productivity improvements but are increasingly shifting towards driving business growth. Enterprise-scale AI adoption is anticipated to ramp up in FY27, providing a significant new opportunity for Indian IT providers to deliver transformation projects and managed services.
Accenture, which has a substantial chunk of employees in India, nearly doubled Gen AI bookings to $5.9 billion in FY25. TCS reported a robust Q1FY26 TCV of $9.4 billion with a strong deal pipeline across verticals and geographies. Infosys reported strong Q1FY26 bookings with $3.8 billion in large deals, including multiple vendor consolidation deals worth over $1 billion. Wipro reported strong bookings of $5 billion Total Contract Value (TCV) with $2.7 billion large deals, driven by vendor consolidation and AI investments.
Despite a challenging environment in the short term, sector commentary suggests a modest recovery is possible in FY27 as macroeconomic conditions stabilize in the US and Europe. The anticipated acceleration in demand for enterprise-scale digital transformation and AI-led projects could drive a 200-300 basis points improvement in revenue growth for Indian IT services companies. Overall, while the near-term outlook remains subdued, the Indian IT sector is poised for growth in the next fiscal year, driven by the adoption of AI and digital transformation.
Infosys and Telstra are considering a joint venture to serve Australian businesses.
Infosys, a leading technology company, is forming a joint venture with Telstra, a major Australian telecommunications company, to provide AI-enabled cloud and digital solutions to Australian businesses. As part of this joint venture, Infosys will acquire 75% of the shareholding in Versent Group, a subsidiary of Telstra that specializes in cloud and digital transformation. Telstra will retain a 25% minority stake in Versent Group, with Infosys having operational control.
The joint venture combines Telstra’s connectivity expertise with Versent’s local digital engineering capabilities and Infosys’ global scale. Versent Group has a team of 650 engineers, advisors, and strategists across Australia, serving large organizations in various sectors, including government, education, financial institutions, energy, and utilities. This strategic collaboration will enhance Versent Group’s cloud and digital transformation expertise with Infosys’ advanced AI capabilities, cloud, data, and digital consulting services.
The transaction is expected to close in the second half of FY 2026, subject to regulatory approvals and customary closing conditions. This joint venture is an extension of the strategic collaboration between Infosys and Telstra, which was announced in 2024 to accelerate Telstra’s software engineering and IT transformation journey. In 2025, the two companies announced another collaboration to advance technology leadership and drive innovation.
The CEOs of both companies expressed their enthusiasm for the joint venture, with Vicki Brady, CEO of Telstra, stating that Infosys’ global scale, industry knowledge, and culture of innovation will accelerate Versent Group’s growth and impact. Salil Parekh, CEO of Infosys, said that the joint venture unveils a new opportunity to accelerate the innovation agenda for enterprises across the region. This partnership is expected to propel AI-enabled cloud and digital solutions for Australian businesses, further strengthening the technology transformation agenda for enterprises in the region.