Infosys, TCS, HCL Tech, Wipro, TechM: Weakest Q2 results in 3 years? Share price targets

Ahead of the kick start of September quarter (Q2) earnings season, Jefferies expects aggregate revenues across its coverage IT firms to grow 1.7 per cent sequentially in constant currency (CC) terms, led by mid-sized IT firms, while large IT firms are seen delivering their weakest Q2 growth in three years.

Jefferies said aggregate margins for IT firms may improve 30 basis points (bps) quarter on quarter (QoQ), supported by currency tailwinds. "Key focus will remain on FY27 growth guidance, demand recovery and AI commentary, with Infosys likely to cut and HCL Tech expected to narrow growth guidance," the global investment bank said.

For Tata Consultancy Services Ltd (TCS), Jefferies said leadership transition, an update on the second phase of BSNL and large deal wins will be key focus areas, in addition to commentary on its AI strategy. For Infosys Ltd, priorities under the CEO-designate, deal wins and deal conversions will be keenly followed. HCL Technologies Ltd’s FY27 margin guidance, deal bookings and margin levers will be watched, while Wipro Ltd’s Q3 revenue growth guidance and large deal ramp-up schedule are likely to be the key focus areas for investors.

For TechM, updates on margin expansion program and sustenance of growth will be eyed.  LTM's outlook on top-2 clients and progress on Randstad acquisition; Coforge's board transition, Encora integration and executable order book; while Mphasis' deal bookings and TCV to revenue conversion will be followed keenly.

Meanwhile Hexaware's CEO transition, update on two GSE clients business and 2026 guidance will be watched keenly.

"While mid-sized IT firms will see higher growth (3.5 per cent QoQ CC), growth among large IT firms may remain subdued at 0.5 per cent QoQ CC, making Q2FY27 the weakest 2Q for large IT firms in the past 3 years. Among large IT firms, HCLT, TechM and Infosys will lead growth due to inorganic contributions, while Wipro (despite 60 bps inorganic contribution) will lag," Jefferies said.

Among mid-sized firms, Jefferies said Coforge with 4 per cent QoQ CC will lead on organic growth while IKS (up 71 per cent  QoQ CC) will lead on overall growth due to 67 per cent inorganic contribution.