IT majors' shares fall following mixed results, weak outlook

All major IT companies have reported mixed results over the past few days, with Infosys being the latest to announce its quarterly earnings.

Following this, Indian IT stocks came under fresh pressure on Friday, with companies such as Infosys, TCS, HCLTech, and Tech Mahindra trading lower, pulling the BSE IT index down around 5%.

TCS


Tata Consultancy Services, the country’s largest IT services firm, reported a 12% year-on-year (YoY) increase in net profit, at Rs 13,718 crore, in the March quarter. Revenues rose 9.6% to Rs 70,698 crore.

On a sequential basis, its profit grew 19.4% while revenues increased 5.4%.

However, the company recorded its first annual revenue decline since listing, with a 2.4% drop in constant currency terms for FY26.

For the full year, TCS reported revenues of Rs 2,67,021 crore, up 4.6%, though it dipped 2.4% in constant currency.

TCS shares fell around 5% on the BSE on Friday as of 2:40 pm.

Infosys

India’s second-largest software services company delivered strong revenue and profit growth in Q4FY26. Net profit rose 20.8% YoY to Rs 8,051 crore, while sequentially it increased 27.7%. Revenue grew 13.4% from a year earlier to Rs 46,402 crore, and was up 2% from the previous quarter.

While profits beat expectations, revenues fell short of street estimates. The company also widened its revenue growth guidance for FY27 to 1.5–3.5% in constant currency terms, compared with 3%–3.5% earlier. This reflects uncertainty linked to the West Asian conflict.

Infosys shares fell around 7% on the BSE.

Wipro

India’s fourth-largest IT services exporter reported a 1.6% decline in FY26 revenues in constant currency terms. In the fourth quarter, its revenues rose 7.7% YoY and 2.9% sequentially to Rs 24,236 crore.

Net profit declined 1.9% compared with the same period last year to Rs 3,502 crore, but increased 12.2% sequentially.

For the June quarter, Wipro expects revenues between $2.59 billion and $2.65 billion, indicating between 2% decline to flat growth sequentially in constant currency.

Wipro shares dropped about 2% on the BSE.

Tech Mahindra

Tech Mahindra posted a 16% YoY rise in net profit to Rs 1,354 crore in the March quarter, supported by better operational performance and margin expansion. Sequentially, profits increased 20.7%.

Revenues for the quarter stood at Rs 15,076 crore, up 12.6% YoY and 4.7% sequentially. Growth was driven by strong deal wins and expansion across key verticals such as communications, BFSI, technology, media, and entertainment, despite a weak macro environment.

The stock fell around 5% on the BSE.

HCLTech

HCLTech reported profits of Rs 4,488 crore in the March quarter, marking a 10% sequential and 4.2% on-year growth.

Revenues for the January–March period increased 12% YoY to Rs 33,981 crore, but showed only a modest 0.3% sequential growth, reflecting the impact of geopolitical uncertainty on deal conversions.

Due to a 35% sequential fall in deal bookings to $1.93 billion, the company lowered its FY27 revenue growth outlook to 1%–4%. It expects services revenue growth to be between 1.5% and 4.5%.

HCLTech shares declined 6% on the BSE.

Reasons for the fall

Despite steady deal flows and stable margins across the sector, the March quarter results point to a slowdown in sequential revenue growth. This has been largely due to delays in project execution and slower ramp-ups.

Another key concern is that the strong multi-year growth seen earlier has now moderated to mid-single-digit levels. This has raised worries about possible deflation or cannibalisation of revenue due to the growing capabilities of artificial intelligence models and agents. In that case, investors would want to find out whether the stock valuations of the IT exporters have been adjusted enough.

The FY27 guidance issued by Infosys and HCLTech, and for the June quarter issued by Wipro, looks less than encouraging.

HCLTech’s services revenue guidance of 1.5%–4.5% is nearly half of market expectations. Infosys has forecast FY27 revenue growth of 1.5%–3.5%, below the anticipated 3%–5% range. Wipro guided for either a flat revenue or a 2% drop on a sequential basis for the first quarter of FY27 amid slower project ramp-ups.


Together, these factors might have weighed on investor sentiment and triggered the recent decline in IT stocks.