IT Sector Q4 Results Preview: Revenue, margins to be muted amid weak global macros; outlook on Trump’s tariffs eyed

Indian Information Technology (IT) companies are expected to report mixed earnings for the fourth quarter of FY25, weighed down by persistent regulatory and economic uncertainties. Analysts believe a deteriorating macroeconomic environment may adversely impact Q4 results and guidance for FY2026.

According to analysts at Nuvama Institutional Equities, while large-cap IT companies are projected to post a sequential revenue decline, mid-cap IT firms are likely to maintain robust organic growth on a quarter-on-quarter (QoQ) basis.

Operating margins across the sector are expected to remain largely stable, with marginal improvements for most players. However, companies impacted by seasonality or wage hikes — such as Infosys, HCL Technologies, and L&T Technology Services — may see slight pressure on margins.

“We forecast the tariff-led elevated level of uncertainty, shall reflect on the commentary and guidance by the companies. We do believe the recovery in discretionary spends might be delayed, but not by much. We are trimming estimates and target prices to reflect that, but the 15% correction (last 3 months) captures it. We remain positive on the sector over the medium to long term while being cautious in the near term,” Nuvama Equities said in a report.

Here’s an overview of how India’s top five IT firms are expected to perform in the fiscal fourth quarter ended March 2025 (Q4FY25):

TCS Q4 Results Preview

Tata Consultancy Services (TCS), India’s largest software services exporter, is expected to report 0.9% QoQ revenue growth to ₹64,550 crore in Q4FY25. In constant currency (CC) terms, revenue is likely to decline 0.2% QoQ, while USD revenue may fall 1% QoQ, primarily due to the ramp-down of the BSNL project. This is expected to be partially offset by a rebound in developed markets.

Net profit is projected to rise 1.5% QoQ to ₹12,568 crore. Operating margins are expected to remain stable, as the impact of BSNL tailwinds may be delayed. Deal wins are likely to remain steady, with investor focus on commentary around the US macroeconomic environment, tariff concerns, and margin trajectory.

Infosys Q4 Results Preview

Infosys is expected to post a 1% QoQ revenue decline in CC terms, and a 1.5% decline in USD terms — within its guided range. EBIT margin is forecast to contract by 100 basis points QoQ, mainly due to the impact of wage hikes. Net profit of Infosys in Q4FY25 is estimated to fall 1.3% QoQ to ₹6,720 crore.

Nuvama Equities estimates Infosys to guide for 2% – 5% revenue growth in CC terms, with an EBIT margin range of 20%–22% for FY26.

HCL Technologies Q4 Results Preview

HCL Technologies is likely to report a 0.7% decline in CC revenue and a 1.3% drop in USD revenue. This is expected to be driven by a 0.5% QoQ growth in Services and a 15% QoQ decline in Products & Platforms (P&P). The Services segment will benefit from two months of inorganic contribution, according to Nuvama.

Net profit is expected to decline 6.6% QoQ to ₹4,288 crore, while EBIT margin may contract by 170 basis points (bps) QoQ, reflecting P&P seasonality. For FY26, HCL Tech is likely to guide for 3% – 5% CC revenue growth in Services and 18% – 19% margin.

Wipro Q4 Results Preview

Wipro’s IT Services revenue is projected to decline 0.4% QoQ in CC terms and 1.0% in USD terms. Operating margins are expected to remain largely flat. Net profit is estimated to fall 3.6% QoQ to ₹3,233 crore, as per Nuvama estimates.

For Q1FY26, Wipro is likely to provide revenue growth guidance in the range of -1% to +1% QoQ in CC terms. Investors will closely watch for updates on its consultancy business and deal execution.

Tech Mahindra Q4 Results Preview

Tech Mahindra is expected to report a 0.7% QoQ decline in CC revenue and a 1.5% drop in USD terms. Gains from the reversal of furloughs and Comviva seasonality are likely to be offset by challenges in the hi-tech segment and low-margin deal closures.

Despite a wage hike, operating margins are expected to remain stable. Management commentary on FY27 revenue and margin guidance, as well as progress on related strategic initiatives, will be closely monitored.

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