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Informist, Friday, Oct 17, 2025

MUMBAI - The near-term pressure in information technology stocks is likely to continue due to muted growth expectation for the second half of 2025-26 (Apr-Mar) even though there is optimism about improving outlook for the sector. Some broking firms expect the uncertainty about US policies to not hit the financial performance of domestic technology players, particularly with respect to the H-1B visas, as these players expect to reduce their dependence on such visas even more going ahead.  

What could limit the growth of the sector is the caution among their US clients, who have been keeping their budget tight as the macroeconomic environment remains challenging for them due to the fog around tariff and trade policies under US President Donald Trump. Though slight revisions were made to the earnings growth guidances by IT companies, it was not enough to cheer the market. This was also reflected in the stock price movement of most IT companies, which fell this week. The Nifty IT index snapped a two-week gaining run and closed 1.6% lower at 34950.70 points Friday, with all 10 constituents in the red. Many of these companies also retained their margin guidances.

Infosys revised its FY26 revenue growth guidance to 2-3% from 1-3% earlier and retained the 20-22% earnings before interest and tax margin view for the 11th time in a row. HCL Technologies, too, revised its FY26 growth guidance to 4-5% from 3-5% earlier and retained the margin guidance of 17-18%. Wipro has guided for a (-)0.5% to 1.5% sequential change in its revenue in constant currency terms for the December quarter. This is better than the (-)1% to 1% movement it had expected for the September quarter. The company's revenue rose 0.3% sequentially in constant currency in the reporting quarter.

Among the positive factors were strong deal wins, a ramp-up of deals, and the momentum in the core banking, financial services, and insurance vertical of these players. However, some of these companies echoed caution in the manufacturing business, particularly due to the slowdown in the automobile industry due to tariff woes. 

Brokerage firms continue to prefer large-cap stocks due to their reasonable valuations as these stocks have fallen sharply in the last three months. Valuations of mid-cap stocks remain expensive as their earnings growth is likely to continue to outperform their large-cap peers, as has been the case for at least the last 17 quarters. The aggregate net profit of six mid-cap IT companies in the Nifty 200 index is expected to grow almost 9% sequentially, sharply higher than the 2% profit rise anticipated for the six large players, estimates from 17 broking firms showed. 

TOP HEADLINES
* Analyst Concall: Aiming for double-digit growth in H2FY26 - LTIMindtree
* Analyst Concall: Wipro upbeat about deal pipeline for second half of FY26
* Analyst Concall: Infosys doesn't see change in business model in near-term
* Earnings Review: Wipro Q2 consol sales up but PAT dn QoQ, misses Street view
* Earnings Review: Infosys Q2 consol PAT recovers; sales grow most in 12 qtrs
* Earnings Outlook: Svcs ops to boost Tata Tech Q2 sales, but PAT seen dn QoQ
* Earnings Outlook: IT cos to fare better QoQ; mid-caps to outshine large cos
* Not seeing dramatic uptick in discretionary spending, says Wipro management
* Earnings Review: Cyient Q2 PAT misses view, falls 17% QoQ on rise in costs
* Mkt conditions uncertain but our large deal pipeline strong, says Infosys MD
* Earnings Review: LTIMindtree beats Q2 estimates; PAT up 12% QoQ
* HCL Tech extends partnership with US-based Zscaler for AI, security services
* Cyient Jul-Sept consol PAT falls 17% on quarter to INR 1.28 billion
* Infosys revises FY26 revenue growth guidance to 2-3%; retains margin view
* Mastek Jul-Sept consol PAT rises 5.9% QoQ to INR 974.5 million
* Earnings Outlook: Wipro's Q2 PAT seen falling QoQ despite rise in revenue
* Earnings Outlook: LTIMindtree Q2 PAT, sales seen up on project ramp-ups
* Earnings Outlook:Infosys Q2 results seen better; sales guidance views differ
* TCS extends 15-year pact with UK retailer Kingfisher to deploy automation
* Analyst Concall: Expect higher growth next year, says Tech Mahindra
* Analyst Concall: Margin on track, Persistent Systems to invest in capability
* Earnings Review:Tech Mahindra Q2 sales growth highest in 13 qtrs, beats view
* Tech Mahindra flags fragile macro situation, sees no sharp rise in spends
* Earnings Outlook: Weak energy segment sales to drag down Cyient Q2 PAT
* HCL Tech partners with GSMA to develop solutions for mobile operators
* Sonata Software, adesso SE to deliver AI initiatives for enterprise clients
* Earnings Review: Strong growth across verticals boosts Persistent Q2 results
* Infosys wins 1.2-bln-sterling, 15-year deal from NHS Business Svcs Authority
* TCS to adopt Google Cloud's Gemini Enterprise to make custom AI agents
* Analyst Concall: HCL Tech says decision making by auto cos just not happening
* Seeing higher discretionary spending on AI deals, says HCL Tech
* Earnings Review: HCL Tech net profit, revenue rise in line with Street view
* Seeing higher discretionary spending on AI deals, HCL Tech says
* Earnings Outlook: Hi-tech, BFSI units to boost Persistent's Q2 PAT, revenue
* Earnings Outlook: BFSI, retail verticals to lift Tech Mahindra Q2 PAT, sales
* Foreign min debars BLS Intl from ministry, India Mission tenders for 2 years
* TCS to create 5,000 jobs in UK, launches AI experience zone in London

Following are the resistance and support levels for the sector's key stocks for next week, as per calculations based on their prices on the National Stock Exchange:

End

Reported by Anjana Therese Antony
Edited by Deepshikha Bhardwaj

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