IT Q4 Results Preview — From Margin To Revenue Outlook, How Will LTIMindtree, TCS & Other IT Stocks Perform

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IDBI Capital Report

Last quarter we saw positive demand environment commentary for FY26 which is now shifted to a cautious stance. Tariff wars raised concern over the discretionary spend in the major market (US) for IT companies which also led to softness in the fourth quarter. Coupled with, furloughs and some client specific issues impacting large cap, despite rupee depreciation in play.

Whereas, mid-cap companies showed resilience reflecting in QoQ revenue growth. Major chunk of large cap has muted to flattish deal wins’ trend from past few quarters with a focus on cost take out & passing AI efficiency to clients.

However, street expects the macros to recover in couple of quarters, as discretionary spend was much elongated and more to it would further lead to delay in Gen AI adoption.

Amid this ambiguity, hiring trend and AI adoption rate is the key indicator of the direction. With near term softness across the board, we expect Tech Mahindra and LTIMindtree in large cap and Coforge and L&T Technology Services (ER&D) to be in better place than others in our coverage in terms of revenue growth.

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