TCS, Infosys, HCL Tech, Wipro: Check Q3 results previews, price targets & more

ICICI Securities' Q3FY26 preview for the top four Indian IT companies—Tata Consultancy Services (TCS), Infosys, HCL Technologies, and Wipro—indicates modest quarter-on-quarter constant currency (CC) revenue growth, ranging between 0.3% and 2.2%. This period is characterised by continued resilience in banking, financial services, and insurance (BFSI) and the ramp-up of previously secured large deals, although traditional year-end furloughs are expected to exert downward pressure on growth rates.

HCL Technologies is projected to lead its peers, with anticipated revenue growth of 2.2% QoQ in CC terms and EBIT margin expansion of approximately 50 basis points (bps). This performance is driven by favourable seasonality in its software product business and ongoing traction in BFSI and hi-tech verticals, partially balanced by subdued auto manufacturing. Margin gains are supported by INR depreciation, AI-led productivity, and positive product seasonality, though wage hikes and restructuring will offset some benefits.

TCS is expected to post 0.8% CC and 0.4% USD QoQ revenue growth, led by BFSI and communication verticals as deal wins from the previous quarter ramp up. ICICI Securities notes the demand environment remains status quo, with companies embedding AI-led productivity in their solutions, leading to a deflationary impact on revenue growth. NIFTY IT is trading at a 20% premium vs. NIFTY 50, despite a lower earnings CAGR.

TCS has announced several key deals, with total contract value (TCV) expected at USD 7–9 billion. The company is set to benefit from INR depreciation, workforce restructuring, and pyramid optimisation, which are anticipated to drive a 20bps QoQ improvement in EBIT margin. However, headwinds remain from a two-month wage hike impact and weaker seasonality. Revenue contribution from ListEngage is projected at USD 6 million for the quarter.

Infosys is forecast to achieve subdued revenue growth of 0.3% CC QoQ, as seasonal weakness from fewer working days and furloughs offsets healthy momentum in BFSI and engineering/R&D services. The recently announced NHS mega deal (EUR 1.2bn, 15-year term) has started ramping up, though it may take a few quarters for full impact. The demand pipeline remains robust, primarily driven by client focus on cost takeout deals, while EBIT margin is poised to expand by around 20bps from INR depreciation and AI-led productivity, countered by seasonal headwinds. Wage hikes are planned for Q4FY26 and Q1FY27.

For HCL Technologies, revenue growth of 2.2% CC QoQ is expected, led by traction in BFSI and hi-tech and stability in telecom. Weakness in auto manufacturing persists. Q3 is traditionally strong for HCLT's products business, but growth is likely to be softer this year due to a shift toward subscription-based revenue. Demand remains unchanged, with a focus on cost takeout and vendor consolidation deals. TCV is expected at ~USD2bn. Marginal EBIT margin expansion of ~50bps is expected, supported by positive seasonality, AI-led productivity, and INR depreciation, partly offset by wage hikes, furloughs, and restructuring. Wage increments are spread over Q3 and Q4FY26.

Wipro is expected to deliver 1.5% QoQ CC revenue growth, including 0.7% organic and 0.8% from a one-month consolidation of the Harman acquisition. The quarter will benefit from the Phoenix deal ramp-up and vendor consolidation with two major US banks. Healthcare performance is expected to moderate, while demand in consumer, retail, and emerging markets remains soft. EBIT margin is likely to drop by 10bps QoQ due to margin-dilutive consolidations, D&A charges, and furloughs, partly offset by AI productivity gains and operational efficiencies.

ICICI Securities highlights that all four companies are actively embedding AI-led productivity improvements, which support margin resilience but exert a deflationary impact on aggregate revenue growth. The demand environment is largely unchanged, with clients favouring cost optimisation and vendor consolidation, while discretionary spending remains subdued.

NIFTY IT continues to trade at a 20% premium to NIFTY 50, despite sector earnings CAGR of 6–8% for FY25–27E versus 14–15% for NIFTY 50. ICICI Securities reiterates its cautious stance on the sector, expressing a preference for TCS among large caps based on superior operating metrics and valuation comfort.

ICICI Securities has a hold rating on Infosys, HCL Tech and Wipro with target price of Rs 1,590, Rs 1,580 and Rs 255. However, it has given an 'add' to Tata Consultancy Services with a target price of Rs 3,282.