US Banks’ Earnings And Readthroughs For Indian IT — Read Motilal Oswal's Analysis

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Motilal Oswal Report

Major US banks—J.P. Morgan, Wells Fargo, Goldman Sachs, Citibank, Morgan Stanley, et al.—reported better-than-estimated results, driven by robust trading revenue. However, heightened caution around macroeconomic conditions was palpable, with all banks emphasizing risks from recessionary pressures and evolving tariff policies.

The technology spend outlook, though, remained intact for now—tech spending remains a strategic priority across the board, aligning with the current commentary from TCS that the US banks are stable.

As argued in our report dated April 04, 2025, we believe verticals such as retail and consumer, manufacturing, HiTech and software, etc., could see delayed or deferred tech spending at least for the next quarter (Q1 FY26E) as clients absorb the uncertainty.

We believe consensus estimates are at risk of being cut by 7-10% over FY26/FY27E. So far, however, it looks like the BFSI sector is still a good hiding place and may well offer some shelter to India's IT services.

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