How TCS, Infosys, HCLTech, Wipro and Tech Mahindra fared in Q1FY26

IT Giants Show Mixed Q1FY26 Performance Amid Macro Pressures

India's top IT services companies—Tata Consultancy Services (TCS), Infosys, HCLTech, Wipro, and Tech Mahindra—have released their earnings for the first quarter of FY26, revealing a mixed bag of performance amid global economic uncertainties, cautious client spending, and continued deal momentum in select verticals.

While some players showed sequential growth in revenues and margins, others remained under pressure due to delays in decision-making, sluggish discretionary spending, and weakness in key verticals like BFSI and telecom.

TCS: Robust Deal Wins, Stable Margins

Tata Consultancy Services (TCS), India’s largest software services exporter, reported revenue of ₹63,250 crore, up 5.4% YoY, with constant currency (CC) growth of 3.7%. The net profit stood at ₹12,780 crore, a rise of 8.6% YoY. The operating margin was stable at 24.5%, supported by improved utilization and cost efficiencies.

Rajesh Gopinathan, CEO of TCS, noted:

“Despite macroeconomic headwinds, we delivered strong deal wins of over $10 billion this quarter, indicating robust demand in cloud, AI, and enterprise transformation.”

The company also witnessed a 6.1% QoQ increase in orders, with strong traction in North America and Europe, despite softness in BFSI.

Infosys: Cautious Clients, Yet Optimistic Guidance

Infosys posted revenues of ₹39,860 crore, growing at 3.2% YoY, while its net profit rose to ₹7,050 crore, up 6.1% YoY. Constant currency revenue growth was moderate at 1.3%, reflecting ongoing client caution.

However, Infosys revised its FY26 revenue growth guidance to 3–5%, up from the 1.5–3.5% range, indicating renewed optimism for the second half.

According to Salil Parekh, CEO of Infosys:

“We are seeing signs of revival in discretionary spending, especially in digital and AI-led projects. While Q1 was subdued, our large deal wins worth $4.5 billion give us confidence going ahead.”

Margins for Infosys improved 70 bps QoQ to 21.7%, aided by currency tailwinds and operational levers.

HCLTech: Outpaces Peers in Growth, Stronger Margin Profile

HCLTech emerged as a standout performer, reporting revenues of ₹28,300 crore, a 6.9% YoY growth and the highest among Tier-1 peers. Net profit rose to ₹4,120 crore, up 8.4% YoY.

The IT services firm clocked a strong EBIT margin of 20.2%, up 110 bps QoQ, led by a better service mix and growth in engineering and R&D services.

CEO C. Vijayakumar said:

“We are seeing healthy demand in cloud, infrastructure, and engineering services. Our balanced portfolio continues to deliver in uncertain times.”

HCLTech’s total contract value (TCV) for new deals stood at $3.8 billion, signaling resilience in its client base.

Wipro: Continues to Struggle, Reorganization Underway

Wipro's Q1FY26 performance remained muted, with revenues declining 1.6% YoY to ₹22,120 crore. Net profit fell to ₹2,680 crore, down 3.1% YoY, as the company faced execution challenges and weakness in key verticals like BFSI and communications.

The EBIT margin dipped to 16.1%, down 50 bps YoY, reflecting continued headwinds from wage hikes and restructuring costs.

CEO Srinivas Pallia, in his post-results briefing, stated:

“We are in the midst of a strategic reset, focusing on simplifying our operations and realigning to growth areas such as generative AI and cybersecurity.”

Despite the lackluster quarter, Wipro bagged large deals worth $1.2 billion, giving hope for a gradual recovery.

Tech Mahindra: Telecom Woes Persist

Tech Mahindra reported a challenging quarter with revenues at ₹13,720 crore, down 3.5% YoY, and net profit at ₹970 crore, plunging 17.9% YoY. The major drag continued to be the telecom vertical, which contributed to over 40% of its revenue.

EBIT margin dropped to 10.3%, impacted by pricing pressure, slower execution, and restructuring efforts.

CEO Mohit Joshi said:

“While our communications segment remains under stress, we are seeing early signs of revival in manufacturing and healthcare. Cost optimization and GenAI solutions will be key levers ahead.”

The company has intensified its focus on automation, AI-led transformation, and new client acquisitions to offset legacy revenue decline.

Sector Snapshot: Challenges and Silver Linings

The Q1FY26 results reflect an IT industry still grappling with macro headwinds, geopolitical uncertainty, and constrained tech budgets across major markets like the US and Europe. However, large deal pipelines, cost transformation mandates, and AI-led demand are providing a cushion.

Richa Agarwal, IT sector analyst at Angel One, observed:

“This is a transition phase for Indian IT. While Q1 saw sluggish revenue growth, improving margins and record deal wins suggest a stronger H2FY26.”

Investor Outlook: Selective Optimism

The Nifty IT index remained rangebound post results, reflecting cautious investor sentiment. However, analysts maintain a neutral-to-positive outlook for the sector, especially with signs of margin improvement and large deal wins.

Top picks for H2FY26, according to most brokerages, remain TCS and HCLTech, given their stable performance and diversified portfolios. Infosys also remains a favorite for its ability to deliver growth with improving operating leverage.

Wipro and Tech Mahindra, on the other hand, are seen as turnaround stories, with medium-term outlooks hinging on successful execution of ongoing transformation plans.