With no visible signs of demand recovery and a structurally weaker H2 FY26, Infosys and HCLTech are expected to maintain FY26 revenue guidance.
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Systematix Report
Brokerage expects seasonal headwinds to weigh on Q3 FY26 performance across IT services coverage. Large-cap IT firms are projected to post sequential USD revenue growth of 0–2%, impacted by furloughs and fewer working days, consistent with historical trends.
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Demand conditions remain largely unchanged, with subdued discretionary spending and cautious client sentiment amid macro uncertainty and ongoing AI-led technology transitions. BFSI is expected to show gradual recovery, while healthcare, manufacturing, and retail verticals remain weak.
Deal activity should stay healthy, driven by vendor consolidation and cost takeout engagements. Ebit margins are likely to remain range-bound as INR depreciation and AI-driven productivity gains are offset by wage hikes and lower utilisation due to furloughs.
With no visible signs of demand recovery and a structurally weaker H2 FY26, Infosys Ltd. and HCLTech are expected to maintain FY26 revenue guidance.
Brokerage maintains a cautious stance on the IT sector, favouring TCS among tier-1 peers and R Systems International Ltd. in the small-cap space.
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