IT Sector Q2 Result Preview— From Revenue To Margin Outook, How will TCS To Infosys And Other IT Firms Perform

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Systematix Report

We expect prolonged uncertainty to cap FY26E growth and push recovery to FY27E. NIFTY IT index is down ~20% YTD on President Trump’s reciprocal tariffs, with Tier-1 valuations now looking reasonable, albeit demand visibility remains weak.

NIFTY IT index trades at 24 times last twelve months PE—17% below its five-year average and in line with its 10-year average.

We remain positive on TCS (21x 1-year forward PE), given its strong order book, resilient margins, and robust return ratios.

We also prefer Blackstonebacked R Systems as a differentiated digital engineering play with synergies from the Novigo acquisition.

We have retained our target prices for TCS, Infosys, Wipro, HCLTech, Tech Mahindra, Sonata Software, and R Systems.

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