Shares of Indian IT companies are trading lower on Friday, April 24, dragging the Nifty IT index down over 3% and making it the top sectoral loser. According to reports from CNBC TV18, a weak growth outlook from Infosys, along with continued global uncertainty, weighed on sentiment across the sector. India's IT sector delivered a disappointing report card for the March quarter, with all major companies missing Street expectations amid weak growth and persistent margin pressure.
Among largecaps, Tata Consultancy Services (TCS) saw revenue growth improve for the third consecutive quarter, but margin performance disappointed investors. As reported by CNBC TV18, Infosys fell short of estimates, reporting a 1.3% decline in constant currency revenue against expectations of a 0.5% growth. Wipro's growth remained subdued despite a boost from the Capco and Designit (Harman DTS) integration, while HCL Technologies reported a sharp miss, weighed down by discretionary spending cuts and project cancellations.
Infosys shares tumbled over 6% to their day's low of ₹1,163 on the NSE following disappointing Q4 results. The company reported a 21% year-on-year rise in consolidated net profit to ₹8,501 crore compared with ₹7,033 crore in the same period last year. Revenue from operations came in at ₹46,402 crore for Q4FY26, reflecting a 13.4% increase from ₹40,925 crore in the corresponding quarter of the previous financial year. However, the company's FY27 revenue growth guidance of 1.5% to 3.5% in constant currency disappointed experts, with analysts citing macro uncertainties and AI's impact on core business competitiveness.
On a constant currency basis, TCS posted growth of 1.2%, Wipro grew 0.2%, while Infosys and HCLTech declined 1.3% and 3.3%, respectively. According to CNBC TV18, for FY26, TCS reported a 2.4% decline in revenue, marking its first annual contraction since inception. Wipro's revenue fell 1.6%, extending its decline for the third straight year. HCLTech grew 3.9%, but missed its guidance of 4-4.5%, while Infosys reported 3.1% growth, at the lower end of its guided range.
Looking ahead, guidance for FY27 remains modest across the sector. As reported by CNBC TV18, HCLTech expects revenue growth of 1-4% with EBIT margins of 17.5%-18.5%, while Infosys has guided for 1.5%-3.5% growth with operating margins of 20%-22%. Wipro's near-term outlook remains weak, with Q1FY27 guidance at -2% to 0%. Workforce trends were mixed, with TCS reducing headcount by over 23,000 employees in FY26, while Wipro, HCLTech and Infosys added 8,810, 3,761 and 5,016 employees, respectively.
Analysts remain divided on the sector outlook, with some maintaining 'Hold' ratings while others maintain 'Buy' ratings. According to Morgan Stanley, the company's FY27 revenue growth guidance of 1.5% to 3.5% signals rising pressure on the existing book of business, with increasing AI adoption leading to compression in core business as productivity gains are passed to clients. Motilal Oswal has maintained a 'Buy' rating with an unchanged target price of ₹1,550, noting that Q4 revenue was impacted by seasonal factors and slower client decision-making. The brokerage expects deflationary impact to persist due to competitive intensity and pricing pressures in a weak demand environment.
