Top Indian IT Firms Navigate Weak Q1 with Cross-Currency Gains

Top Indian IT companies are expected to report modest Q1 FY26 results, impacted by sluggish demand in consumer and manufacturing sectors. However, cross-currency tailwinds may provide revenue growth support. Mid-tier companies might perform better compared to tier-1. Persistent macroeconomic challenges and US tariffs impact demand.

As Q1 FY26 unfolds, top Indian IT companies are bracing for a modest performance, weakened by reduced demand across crucial segments like consumer and manufacturing. Despite these challenges, mid-tier firms may fare better, according to brokerage estimates.

The depreciating dollar against major currencies is projected to provide a 100-200 basis points boost in cross-currency revenue, offering some respite. The IT earnings season kicks off with key announcements from Tata Consultancy Services, HCL Tech, Tech Mahindra, and others.

HDFC Securities anticipates mixed revenue growth across the sector, with tier-1 showing muted results but solid gains in mid-tier companies. Meanwhile, the ongoing macroeconomic uncertainties, US tariff pauses, and robust deal pipelines in certain areas indicate different growth trajectories within the sector.