TCS vs Infosys vs Wipro Q4 results: What IT sector Q4 earnings signal? What should investors do?

Major Indian IT players—TCS, Infosys, and Wipro—have reported disappointing Q4FY25 earnings, against the backdrop of major headwinds such as global growth slowdown, persistent demand uncertainty, and concerns over US trade policies.

While Indian IT companies' Q4FY25 results reveal mixed performance on key numbers, the cautious tone of their management for FY26 amid global uncertainties is a matter of concern.

TCS vs Infosys vs Wipro Q4 results

TCS reported the slowest revenue growth in four years at ₹64,479 crore against ₹61,237 crore posted in the same period last fiscal. Its consolidated profit after tax (PAT) for Q4FY25 declined 1.7 per cent to ₹12,224 crore against the profit of ₹12,434 crore reported for the corresponding quarter of the previous financial year.

Infosys reported an 11.75 per cent year-on-year (YoY) decline in consolidated net profit for Q4FY25 to ₹7,033 crore. The company's revenue from operations for the quarter under review rose 8 per cent YoY to ₹40,925 crore from ₹37,923 crore in the corresponding quarter of the last financial year.

Infosys projected flat to 3 per cent revenue growth for FY26 in constant currency terms, its weakest guidance since April 2009.

Wipro reported a 26 per cent year-on-year jump in consolidated net profit to ₹3,569.6 crore. Consolidated revenue from operations for the quarter stood almost flat at ₹22,504.20 crore.

After adjusting for currency fluctuations, Wipro expects its Q1FY26 IT services revenue to decline by 1.5 per cent to 3.5 per cent compared to the previous quarter.

What do the IT sector Q4 earnings signal?

The largest IT players' Q4 numbers and growth outlook indicate the worst may not be behind. While demand has been weak for the last several quarters amid elevated interest rates and sticky inflation, US President Donald Trump's tariff policies have aggravated worries over economic growth. Most experts feel the US may see a recession, and a trade war will significantly dent global economic growth.

The sector appears to be at an inflection point as the industry grapples with uncertainty stemming from Trump’s tariffs, the economic slowdown, and the rise of artificial intelligence (AI).

Experts say the financial year 2025-2026 would be challenging, even though it could be slightly better than the last financial year.

"We are expecting the Indian IT companies may face a challenging FY26 (better than FY25) reflecting macroeconomic challenges and client spending uncertainties, but focused on digital, cloud, and AI capabilities will help to sustain long-term growth," said Rajesh Sinha, Senior Research Analyst at Bonanza Group.

"The biggest concern for Indian IT companies will be the US President Donald Trump’s reciprocal tariffs and sectoral tariffs, which may force enterprises to rethink their tech spends, which cause delays in decision making," Sinha said.

Sinha highlighted the fault lines in IT majors' Q4 results.

He underscored that TCS reported its second consecutive year of single-digit growth. During the call, TCS mentioned that delays in decision-making with respect to discretionary investments were observed.

Infosys also reported lower-than-expected results, with constant currency revenue dropping 3.5 per cent QoQ and dollar revenue falling 4.2 per cent QoQ. 

Infosys also guided for 0-3 per cent revenue growth in FY26 in constant currency terms, lower than expected, reflecting uncertainty in the global market, while maintaining margins at 20 per cent to 22 per cent, said Sinha.

Wipro also missed estimates and guided for a revenue decline of 1.5-3.5 per cent in Q1FY26 due to deteriorating client spends, Sinha noted.

According to Puneet Singhania, director at Master Trust Group, Infosys's Q4 results, along with earnings from other major IT players, continue to indicate softening demand in the Indian IT industry.

Singhania believes that the biggest challenge for Indian IT companies in FY26 could be the reciprocal tariffs imposed by US President Donald Trump.

He underscored that the sector is experiencing a softening in demand, primarily because of ongoing global uncertainties and macroeconomic headwinds. These factors are impacting client confidence and causing clients to take a cautious approach to IT spending.

Singhania added that on the demand side, there seems to be a rising feeling of uncertainty among major user industries, most of which are adopting a wait-and-watch strategy before investing in new projects.

"Several IT majors have provided cautious guidance for the upcoming quarters, indicating that the journey ahead could continue to remain uneven. While long-term fundamentals remain intact, the near-term outlook for the sector appears to be cautious," said Singhania.

What should investors do?

Experts appear cautious about IT stocks at this juncture. Some advise waiting for the next one to two quarters to gain clarity before placing any bets on them.

Prashanth Tapse, Senior Vice President (Research) at Mehta Equities, said investors should adopt a cautious approach in the near to medium term in the Indian IT sector. This is due to challenges and weaknesses in Western markets, tariff impact, and spending uncertainties across the clientele.

"We believe Q1FY26 and Q2FY26 will be watchful quarters for the sector, and investors should consider a 'wait and watch approach' until we see clear signs of recovery emerge in the Western countries' microeconomic data points, such as a rise in microeconomic data points and uncertainty phase-out," said Prashanth Tapse, Senior vice president (Research) at Mehta Equities.

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