Q1 results: Why Infosys is expected to be a top performer in the IT sector
Q1 results expectations: TCS is expected to post near-flat sequential dollar revenue growth of 0.2%, with EBIT margin seen falling by 90 basis points. HCLTech and Wipro are also projected to report sequential revenue declines, reinforcing the view that broad-based recovery remains elusive.
- Jul 7, 2026,
- Updated Jul 7, 2026 4:44 PM IST
Q1 results expectations: IT majors are heading into the June quarter with expectations firmly anchored around another muted earnings season, but Infosys is increasingly being seen as the standout large-cap name as investors hunt for relative resilience in an otherwise cautious sector outlook. The central debate is no longer just about growth, but whether AI-led repositioning can offset weak discretionary spending, slower client decisions and persistent margin pressure.
Muted quarter, selective winners
Brokerage expectations for the sector suggest a soft start to FY27, with macro uncertainty continuing to delay spending decisions across key overseas markets. While a weaker rupee has offered some support, that tailwind is being offset by wage hikes, deal ramp-up costs and merger-related expenses.
Among frontline names, TCS is expected to post near-flat sequential dollar revenue growth of 0.2%, with EBIT margin seen falling by 90 basis points. HCLTech and Wipro are also projected to report sequential revenue declines, reinforcing the view that broad-based recovery remains elusive.
Why Infosys is standing out
Infosys, however, is being positioned as the top performer within large-cap IT. Sequential revenue growth of over 2.1% is being pencilled in, with acquisitions such as Stratus and Optimum expected to support earnings momentum. There is also growing optimism that its FY27 guidance could be raised to 2-4%.
The bullish case is also being reinforced by its AI push. “Infosys can be a top performer,” G Chokkalingam, Founder and Managing Director of market research firm Equinomics Research told BTTV, adding that “there have been a lot of activities in integrating AI in their service offering” alongside multiple collaborations announced over the last quarter. That, he argued, should help the company “tactically” outperform peers.
Rupee tailwind may not fix margins
Even so, the bigger structural concern for the sector remains margins. The expert flagged skepticism over the assumption that the rupee’s roughly 5% fall over the past six months will materially lift profitability for Indian IT exporters.
“Whether the five percent fall in the rupee will help the Indian IT companies to improve the margin significantly — that is where I have a strong doubt,” he said. The argument is significant because it challenges a long-held market belief that currency depreciation automatically boosts export-heavy IT earnings.
Large caps versus mid-tier plays
The broader takeaway for investors is that large-cap IT may still offer tactical trading opportunities, especially in beaten-down names, but not yet a full-fledged trend reversal. Tech Mahindra is also seen as a relative outperformer, with revenue growth of over 1% and margins improving to 17.5%.
That fits into a wider market narrative already visible in recent months: while the IT index has been under pressure, stock-specific execution, AI readiness and acquisition-led growth are becoming more important than sector-wide optimism. For now, Infosys appears best placed to benefit from that shift.
Q1 results expectations: IT majors are heading into the June quarter with expectations firmly anchored around another muted earnings season, but Infosys is increasingly being seen as the standout large-cap name as investors hunt for relative resilience in an otherwise cautious sector outlook. The central debate is no longer just about growth, but whether AI-led repositioning can offset weak discretionary spending, slower client decisions and persistent margin pressure.
Muted quarter, selective winners
Brokerage expectations for the sector suggest a soft start to FY27, with macro uncertainty continuing to delay spending decisions across key overseas markets. While a weaker rupee has offered some support, that tailwind is being offset by wage hikes, deal ramp-up costs and merger-related expenses.
Among frontline names, TCS is expected to post near-flat sequential dollar revenue growth of 0.2%, with EBIT margin seen falling by 90 basis points. HCLTech and Wipro are also projected to report sequential revenue declines, reinforcing the view that broad-based recovery remains elusive.
Why Infosys is standing out
Infosys, however, is being positioned as the top performer within large-cap IT. Sequential revenue growth of over 2.1% is being pencilled in, with acquisitions such as Stratus and Optimum expected to support earnings momentum. There is also growing optimism that its FY27 guidance could be raised to 2-4%.
The bullish case is also being reinforced by its AI push. “Infosys can be a top performer,” G Chokkalingam, Founder and Managing Director of market research firm Equinomics Research told BTTV, adding that “there have been a lot of activities in integrating AI in their service offering” alongside multiple collaborations announced over the last quarter. That, he argued, should help the company “tactically” outperform peers.
Rupee tailwind may not fix margins
Even so, the bigger structural concern for the sector remains margins. The expert flagged skepticism over the assumption that the rupee’s roughly 5% fall over the past six months will materially lift profitability for Indian IT exporters.
“Whether the five percent fall in the rupee will help the Indian IT companies to improve the margin significantly — that is where I have a strong doubt,” he said. The argument is significant because it challenges a long-held market belief that currency depreciation automatically boosts export-heavy IT earnings.
Large caps versus mid-tier plays
The broader takeaway for investors is that large-cap IT may still offer tactical trading opportunities, especially in beaten-down names, but not yet a full-fledged trend reversal. Tech Mahindra is also seen as a relative outperformer, with revenue growth of over 1% and margins improving to 17.5%.
That fits into a wider market narrative already visible in recent months: while the IT index has been under pressure, stock-specific execution, AI readiness and acquisition-led growth are becoming more important than sector-wide optimism. For now, Infosys appears best placed to benefit from that shift.