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Bloomberg Quint
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IT Q4 Results Preview: Revenue Growth To Remain Muted, All Eyes On Guidance
- The Indian IT sector is preparing to announce its fourth-quarter results, with Tata Consultancy Services Ltd. initiating the earnings season on April 10.
- Revenue growth for IT companies in the last quarter is expected to be modest, with a focus on guidance for the financial year 2025-26 amidst challenges like delayed discretionary spending recovery and tariff wars uncertainty.
- Analysts project a range of -1% to +0.1% revenue growth for Tier-I IT firms and 0.5% deceleration to 5% positive growth for Tier-2 firms in the fourth quarter.
- Expectations include a sequential revenue decline due to seasonal weakness, lower billing days, and demand deterioration for large IT companies in March 2025 quarter.
- Margins in the fourth quarter are anticipated to stay flat, with divergent EBIT margin performance among companies attributed to various factors like wage increases and seasonal trends.
- The IT sector outlook for fiscal 2026 might be impacted by the bearish sentiment stemming from the challenging demand environment.
- TCS is expected to see 6.4% YoY revenue growth driven by specific verticals, while Infosys may witness a sequential revenue decline of 2.3% in the fourth quarter.
- Wipro's revenue guidance for the June 2025 quarter is projected to be in the range of -0.5% to +1.5%, with a focus on sectors such as BFSI and healthcare.
- HCLTech is forecasted to experience a 0.7% revenue decline and 0.9% growth in services business in the fourth quarter, with EBIT margin anticipated at 18.2%.
- Analysts expect cautious FY26E guidance and IT services revenue growth at 2.5-4.5% year-on-year in constant currency terms for fiscal 2026.
- The industry will keenly watch new deal wins, demand outlook, and revenue trajectory amidst challenging market conditions in the IT sector.
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