Should you 'buy' IT stocks ahead of Q4 earnings? TCS, Infosys, HCL Tech, Wipro, Tech Mahindra, Cyient

Should you Buy IT stocks: IT sector bellwether TCS will kick off the Q4 earnings season today. Other IT sector players will also report their March 2026 quarter and fiscal earnings in the near term. According to IDBI Capital, the Indian IT sector faces muted growth, resilient margins in Q4 with main focus on FY27 guidance. 

The brokerage says deal wins continue to be robust; however, the majority are concentrated on cost reduction and vendor consolidation instead of initiating new digital projects, which is constraining short-term revenue growth.

On the other hand, AI offers a significant long-term opportunity, with projections indicating substantial growth in the AI services market by 2030, which will enhance productivity and revenue per employee.

Here's a look at what IDBI Capital says ahead of Q4 earnings of the IT majors. 

TCS 

IDBI Capital has assigned a price target of Rs 3,733 on the TCS stock with a 'buy' call ahead of Q4 earnings. The brokerage expects QoQ revenue to rise by 1.3%/3.8% in USD/INR terms led by BSFI and Tech vertical. It expects EBIT margin to fall by 7 bps QoQ for TCS.

TCS is likely to report a 8% rise in revenue at Rs 69,635.9 crore against Rs 64,479 crore revenue in the March 2025 quarter. On a QoQ basis, revenue is seen rising 3.8%. 

IDBI Capital expects a 12.8% rise in net profit to Rs 13,787.9 crore in the March 2026 quarter against Rs 12,224 crore in the year ago period. 

According to the brokerage, key things to watch out for in today's TCS Q4 results are total contract value (TCV) of deal wins specially in AI and digital transformations, commentary on AI infrastructure investment, employee restructuring, deal pipeline conversion trend, trends in Generative AI and outlook on Middle East strategy.

Infosys 

The brokerage has assigned a 'hold' call on the stock of the Bengaluru-based IT major. The IT stock has a target of Rs 1714 . 

The brokerage expects revenue to see flat growth. It anticipates EBIT margin to expand by 19 bps due to rupee depreciation and absence of labour code provisions. Key things to watch out for ahead of the IT major's earnings are project maximus outlook; trend in discretionary spends; traction in BFSI and strategic deals; margin outlook; outlook on conversion of deal pipeline & deal wins and hiring & utilisation outlook.

Revenue in Q4 is seen rising 14% to Rs 46,622.2 crore and 2.5% on a quarter on quarter basis. Net profit can surge 9.3% to Rs 7692.7 crore against Rs 7038 crore profit in the year ago period. 

EBIT margin is expected to rise 45 bps to 21.40% in the last quarter against 20.95% in the March 2025 quarter. 

HCL Tech

The IT firm is expected to report a 8.8% rise in net profit to Rs 4,686.1 crore in Q4 against a profit of Rs 4307 crore. Revenue is likely to rise 13.1% to Rs 34,204.9 crore in Q4 against Rs 30,246 crore in the year ago period.  

EBIT margin is expected to fall by 49 bps to 17.5% in Q4 against 17.99% in the year ago period.  The brokerage said investors should watch out for commentary on deal pipeline, especially large deals, pricing; hiring trends, Margin outlook, Impact of AI deals on IT services deal and Gen AI strategy. IDBI Capital has a assigned a price target of Rs 1725 with a hold call to the IT stock. 

Wipro 

IDBI Capital has assigned a price target of Rs 286 with a hold call to the IT stock. Wipro is likely to report a 4% fall in net profit to Rs 3443.4 crore in Q4 against a profit of Rs 3588.1 crore in the year ago period

Revenue is likely to rise 7.8% to Rs 24,249 crore in Q4 against Rs 22,504.2 crore in the year ago period.  

EBIT margin is expected to fall by 77 bps to 16.5% in Q4 against 17.27% in the year ago period. 

The brokerage said commentary on the large deal wins specially AI deals and its connect with revenue growth, commentary related to the pricing pressure in the healthcare vertical and outlook on Middle East strategy will be tracked during Q4 earnings of Wipro. 

Tech Mahindra

Investors should watch out for large deal wins, update on AI deals, commentary on demand of telecom clients and digital transformation budget, Panning out margin programme and commentary on Middle East strategy, said IDBI Capital.

Tech Mahindra is likely to report a 21.6% rise in Q4 net profit to Rs 1418.7 crore in Q4 against a profit of Rs 1166.7 crore in the year ago period. Revenue is seen climbing 10.4% to Rs 14,778.2 crore in Q4 against Rs 13,384 crore in the year ago period.  

EBIT margin is expected to rise 280 bps to 13.30% in Q4 against 10.50% in the year ago period. The brokerage expects EBIT margin to expand by 16 bps QoQ led by cost efficiencies programme and rupee depreciation.

IDBI Capital has assigned a price target of Rs 1922 with a buy call on the IT stock. 

Cyient

Investors should track outlook on verticals like Aerospace and Communications, Transportation and ENUm, commentary on global demand, outlook on EBIT margin,guidance on IT spend in key verticals and order book trend.

Cyient is likely to report a 3.4% fall in Q4 net profit to Rs 184.2 crore in Q4 against a profit of Rs 190.7 crore in the year ago period. Revenue is seen flat at Rs 1898.7 crore in Q4 against Rs 1909.2 crore in the year ago period.  

EBIT margin is expected to remain unchanged in Q4 against 12.30% in the year ago period. 

IDBI Capital has assigned a price target of Rs 1307 with a buy call on the IT stock. 

Additionally, the brokerage in its IT sector earnings preview said margins were anticipated to improve year-over-year due to the depreciation of the rupee and cost control strategies, including reduced subcontracting and enhanced utilisation, although hedging may introduce some volatility.

Guidance for FY2027 is expected to remain modest within the projected range, influenced by geopolitical uncertainties and pricing pressures stemming from AI-driven efficiencies.

The sector is transitioning towards an AI-centric model, characterised by weak short-term growth but more favourable medium-term prospects.