Axis Bank, Wipro, LTIMindtree, Angel One, Indian Hotels, Clean Science Q1 Results Review — HDFC Securities

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HDFC Securities Institutional Equities

Axis Bank - Perennial search for portfolio stability

Axis Bank Ltd.’s Q1 FY26 earnings missed our estimates on account of higher slippages/credit costs arising from yet another episode of divergent impairment recognition practices (vs peer banks). The additional provisioning (Rs 8.1 billion) adversely impacted RoA by 15bps.

Growth was soft on both sides of the balance sheet, coupled with disappointment on margins. Deposit growth (~9% YoY/-1% QoQ) was sub-par, with CASA ratio declining to 40.3% (-46bps QoQ). The loanto-deposit ratio deteriorated ~250bps QoQ to 91.2% as loan growth clocked in at +1.8% QoQ.

While Axis Bank has improved the quality of its deposit franchise, the bank has consistently been inferior to its peers on underwriting and impairment recognition policies.

We cut our FY26E/27E estimates by 2.5%/1.4%, factoring in elevated credit costs and impending margin compression (residual impact of the last 75 bps repo rate cut is yet to play out). We maintain Add with a revised target price of Rs 1,290 (standalone bank at 1.7x Mar-27 adjusted book value per share).

Wipro - Muted guidance; improving trajectory

Wipro Ltd. reported a 2% QoQ CC revenue decline, aligning with the lower end of its guidance. The IT services Ebit margin stood at 17.3%, in line with our expectations. For Q2 FY26E, the company issued a muted revenue growth guidance of -1% to +1% QoQ CC, reflecting ongoing macroeconomic uncertainty.

The large deal bookings totalled $2.7 billion, including 16 large deals (with two mega deals in the BFSI vertical). Many of these wins are focused on cost optimization and vendor consolidation, which typically require upfront investments—such as talent acquisition, planning, and onboarding—potentially impacting margins in the near term.

Despite a cautious stance due to the macro environment, management remains optimistic about H2 FY26E, expecting it to outperform H1 FY26E. Strong deal momentum in key verticals like BFSI and technology and communications, particularly those leveraging AI and consulting-led strategies, is expected to support improved revenue conversion.

However, some large projects remain on hold, especially in sectors like manufacturing, automotive, and retail/CPG, which are affected by geopolitical tensions and tariffs.

While order bookings have been robust, client sentiment remains cautious. We maintain a Reduce rating on Wipro, with a revised target price of Rs 250, based on 18 times June FY27E earnings.

LTIMindtree - Steady growth and strategic wins

LTIMindtree Ltd. delivered a steady performance this quarter, with both revenue and margins aligning with our expectations. The company posted a healthy 2% QoQ growth in USD revenue, driven by robust momentum in the consumer vertical and the European region.

The TCV remained stable at $1.63 billion; the key highlight was LTIMindtree securing its largest-ever deal with a global agricultural business leader. This engagement involves deploying an AI-powered model for application management, infrastructure support, and cybersecurity services. It also includes platforms such as SAP S4HANA, ServiceNow, and Microsoft Azure, with a strong emphasis on operational efficiency and simplification.

The management remains optimistic about the continuation of the large deal momentum over the coming quarters and expects an improvement in deal closure rates.

They also expressed confidence in sustaining growth into Q2 FY26E, with margin expansion anticipated through the ongoing “Fit for Future” initiatives.

The company’s long-term goal of reaching $10 billion in revenue by FY31 remains unchanged.

We maintain our earnings estimate and reiterate our Add rating, with a target price of Rs 5,400, based on 24x June 27E EPS.

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