Infosys, Tech Mahindra, Other Large-Cap IT Firms To Post Modest Q2 Growth Amid Global Headwinds: Equirus
Mid-tier firms such as Coforge, Persistent Systems, R Systems and eClerx are projected to deliver healthier growth.
Infosys Ltd. and Tech Mahindra Ltd. are among the six major large-cap Indian information technology majors who are likely to post modest sequential growth in the quarter ended September, according to Equirus Securities.
The uptick in revenue will come amid cautious demand and an uncertain global macroeconomy, the financial services firm said in its report. The growth will be supported by currency tailwinds and cost optimisation, it added.
Among large caps, the brokerage prefers Infosys and Tech Mahindra, while Mphasis, Zensar, KPIT and eClerx remain its top midcap picks.
According to its quarterly preview, the top six large-cap IT firms are likely to report constant currency revenue growth between flat and 2.1% quarter-on-quarter, with LTI Mindtree and Infosys expected to perform at the higher end of the range, and Wipro at the lower.
Mid-tier firms such as Coforge, Persistent Systems, R Systems and eClerx are projected to deliver healthier growth.
Equirus noted that macroeconomic headwinds that began earlier this year continue to weigh on enterprise technology spending, keeping client decision-making conservative.
However, stable quarter-on-quarter demand and improving deal conversions are expected to lend support to top-line growth. The brokerage anticipates a mild improvement in profitability, with currency depreciation and cost efficiencies offsetting wage hikes and one-off costs.
For the top six companies, Equirus forecasts a small boost from cross-currency movements, while midcap IT firms are likely to post revenue growth between 3.6% and 5.8% in constant currency terms, led by strong execution at Coforge and steady gains at Persistent Systems. In contrast, engineering research and design firms are expected to see muted growth due to weak mobility and automotive demand.
The brokerage expects commentary from IT leaders to remain cautious, particularly in the absence of clarity on tariff-related issues. Still, demand from the banking, financial services and insurance sector remains relatively resilient. Investors will be watching for updates on deal pipelines, ramp-ups of large contracts, and client decision-making timelines.
How Will Top Six IT Companies Perform?
Equirus anticipates a minor upward tweak in Infosys’s full-year revenue guidance to 2–3% constant currency growth, with its margin outlook unchanged at 20–22%.
HCLTech is expected to retain its growth and margin guidance on the back of steady services demand, while Wipro is likely to forecast a flattish performance for the December quarter.
TCS is projected to deliver subdued 0.6% quarter-on-quarter growth, constrained by international market softness, though margins should improve due to rupee depreciation, as per the brokerage.
Infosys is seen posting around 2% growth, aided by ongoing efficiency programmes.
Wipro’s revenue is expected to remain flat, reflecting ramp-up costs from earlier deal wins, it added.
Tech Mahindra is also expected to report slight sequential improvement, supported by cost controls and firm BFSI and retail verticals.
