Q1 earnings wrap: India's top IT firms report single-digit growth; clients cautious amid weak macros, AI drives selective uptick

India’s top IT services companies closed the first quarter of FY26 with modest single-digit revenue growth, reflecting the impact of global macroeconomic uncertainty, geopolitical instability, and sluggish client decision-making.

Despite a cautious outlook, industry leaders pointed to emerging opportunities in artificial intelligence, vendor consolidation, and cost optimisation.An overview of the Q1 performance reveals year-on-year revenue growth ranging from 0.8% for Wipro to 8.1% for HCLTech. Axis Securities, in a note on Infosys, said global economic uncertainty, including unresolved tariff risks, continues to weigh on discretionary IT spending and delays decision-making across client segments, PTI reported. TCS, India’s largest IT exporter, reported a 1.3% revenue growth at Rs 63,437 crore, with net profit rising 5.9% to Rs 12,760 crore. CEO K Krithivasan acknowledged demand contraction and cautioned against expectations of double-digit revenue growth in FY26.“The delays we saw in decision-making last quarter have intensified,” Krithivasan said, expressing hope that discretionary spending would return as macro conditions stabilise.

Infosys posted 7.5% revenue growth to Rs 42,279 crore and an 8.6% rise in net profit to Rs 6,921 crore. The company reported $3.8 billion in large deal wins and raised the lower end of its FY26 revenue guidance to 1–3% from 0–3% earlier. CEO Salil Parekh described the global environment as “not fully settled,” noting weakness in sectors like logistics, consumer products, and manufacturing.Wipro reported a marginal 0.77% growth in revenue to Rs 22,135 crore, though net profit rose 9.8% to Rs 3,336.5 crore.

CEO Srinivas Pallia said clients are prioritising cost-focused initiatives and vendor consolidation, while AI and modernisation efforts continue to grow.The core IT services segment at Wipro generated Rs 22,080 crore, up just 0.8% year-on-year and down 1.6% sequentially. The company has guided for Q2 revenue to grow between -1% and 1% in constant currency.HCLTech saw the strongest revenue growth among Tier-1 players at 8.1% year-on-year, touching Rs 30,349 crore.

However, its profit dropped 9.7% to Rs 3,843 crore, weighed down by higher costs and a one-time hit from a client bankruptcy. CEO C Vijayakumar said the June quarter was historically the weakest for the company, although the environment, with some variations, mainly remained stable and did not deteriorate as feared at the start of the quarter.Tech Mahindra’s revenue rose 2.65% to Rs 13,351.2 crore, with net profit surging 33.9% to Rs 1,140.6 crore.Analysts from Nuvama Institutional Equities expect the current demand softness to persist for another one to two quarters, but maintain a positive long-term view given the high tech debt across global enterprises, which could fuel spending once macro stability returns.