IT Q1 Results Preview: Tier-2 Firms Likely To Shine Amid Stable Macro, Strong Deal Wins
While the top five IT giants continue to feel the drag of weak discretionary spending and client caution, Tier-II firms appear to be benefiting from sharper execution and focused vertical bets.
India's information technology sector enters the first quarter of the current financial year on a cautiously optimistic note, with early trends pointing to stability in the global macroeconomic environment and a strong pipeline of large deal wins across the board.
While Tier-I IT companies are still tuned down with subdued revenue growth, Tier-II firms are expected to post stronger numbers, continuing a trend seen over the last few quarters.
There's also a growing consensus that delayed technology spending cannot be deferred much longer, and a catch-up in demand is expected in the coming quarters.
Macro Environment Holds Steady
Since March 2025, the global macro situation has not worsened, according to analysts tracking the sector. While uncertainty in discretionary spending remains, especially in sectors like retail and auto ER&D, core verticals such as BFSI are showing resilience.
Brokerage reports suggest that demand in banking and financial services remains robust and is likely to act as a support for top-line growth, especially for firms with high BFSI exposure.
Tier I Companies
Estimates from Bloomberg hint at a muted performance for most Tier-1 IT players.
Tata Consultancy Services Ltd. is projected to report a 0.3% rise in revenue and a 0.32% rise in net profit, growth at a lesser percentage largely due to the ramp-down of the BSNL project and slow growth in developed markets.
Infosys Ltd., which is expected to post a 2% rise in revenue, might raise its full-year constant-currency-revenue guidance to 1–4% from the earlier 0–3%.
HCL Technologies Ltd. may hold its guidance between 2% and 5% CC growth, but brokerages are split on whether the company will upgrade it this quarter.
Meanwhile, Wipro Ltd. could disappoint again, with a 1.8% drop in revenue and a lackluster Q2 guidance on the cards.
Tech Mahindra Ltd. is expected to post a 1.9% net income growth and a 7.2% rise in EBIT. The company’s commentary on FY27 revenue and margin guidance will be closely watched.
Tier II Companies
The Tier II IT pack, where there are companies like Coforge, Persistent Systems and Mphasis, are set to post a healthy growth.
Coforge Ltd. is expected to clock the highest revenue growth at 9.3%, buoyed by its Sabre deal. The firm is also likely to see a sharp 25% jump in EBIT and a 27% rise in net income.
Persistent Systems Ltd., targeting a $2-billion revenue milestone by FY27, is forecasted to grow revenue by 4% and net income by 6%, with brokerages estimating an over 15% CC growth.
Mphasis Ltd., with expected revenue growth of 1.3%, continues to build on strong deal wins, though margin expansion may remain limited this quarter.
LTIMIndtree Ltd. and Oracle Financial Services Software Ltd. are also expected to report a 5.62% growth and a 0.37% decline in income respectively, with key focus on LTIMindtree's strategic priorities under its new CEO.
Outlook: Turning the Corner?
While the top five IT giants continue to feel the drag of weak discretionary spending and client caution, Tier-II firms appear to be benefiting from sharper execution and focused vertical bets. Analysts believe this divergence could widen if Tier-1 players don’t see a pickup in client budgets over the next couple of quarters.
With large deal wins already in the bag and macro conditions stabilising, many in the industry are betting that tech spending will resume in earnest and that Q1 FY26 could mark the beginning of that upcycle.
