USD revenue growth for largecaps is likely to range from -1.4% to +2.5% QoQ, with Infosys expected to lead on deal ramp-ups. Margin gains may be limited due to low utilization and lack of operating leverage.
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Systematix Report
We expect the six IT services companies within our coverage to report modest QoQ revenue growth during Q1 FY26 on muted demand environment, weak discretionary spending and slower client decision making. Global enterprises remain on the sidelines, adopting a wait-and-watch approach to assess the tariffed potential impact on their cost structures and supply chains.
Deal wins are expected to remain stable, driven by cost optimization and vendor consolidation projects, though momentum may be tempered by softness in the consumer, telecom, and automotive manufacturing verticals.
USD revenue growth for largecaps is likely to range from -1.4% to +2.5% QoQ, with Infosys expected to lead on deal ramp-ups. Margin gains may be limited due to low utilization and lack of operating leverage.
While near-term outlook remains subdued, we stay constructive over the medium-to-long term given strong digital transformation priorities and GenAI adoption.
Valuations have moved up meaningfully, but we continue to prefer TCS for its consistent execution and favorable risk-reward.
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