India’s top five IT companies are looking forward to a rebound. Now all bets are closed.
The first quarter of this fiscal year provides companies with a platform to showcase performance from the previous year and make forecasts over the next 12 months, giving analysts and investors a sense of what they expect.
Compared with fiscal 24, the top five IT Services companies in India are expected to end in 2024-25, with a growing awareness of demand for technology services and increasing demand.
But in Trump’s tariff war, analysts say India’s top IT companies should postpone annual growth guidance for 2025-26, or at least remain conservative in forecasts.
While Trump’s controversial tariffs did not directly target India’s $283 billion IT services sector, which earned most of its revenue from the U.S., his retaliatory actions created additional uncertainty in the technology spending of some of the world’s largest companies.
“Since U.S. policy decisions are asymmetric, there will be many moving parts that determine the next step for the government. So, in terms of market dynamics, the board visibility is very low,” said Thomas Reuner, chief analyst at PAC, an IT consulting firm established at Paris headquarters. “In this context, the PAC does not expect the organization to block guidance, but rather sets out an extremely cautious outlook.”
Analysts in Kotak’s institutional interests also made similar comments.
“The focus will be on annual guidance like Infosys and HCLT (HCL Technologies),” Kotak’s Kawaljeet Saluja, Sathishkumar S. and Vamshi Krishna said in a note on March 4. “Because of higher uncertainty in the short term and in fiscal 2026, companies may prefer a conservative stance and lack of revenue driven by large transactions.”
The alternative is to delay guidance, Kotak analysts said. “Companies may be cautious in deferring guidance (FY26) until there is more certainty in the demand environment or limiting guidance to guidance for the next quarter, where visibility is higher,” they said.
Although Infosys Ltd, HCL Technologies Ltd and Wipro Ltd usually provide revenue guidance throughout the fiscal year, TATA Consultancy Services Ltd and Tech Mahindra Ltd do not.
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“No bets”
Trump imposed a series of import tariffs on at least 60 countries to boost U.S. manufacturing. This is expected to make it more difficult for U.S. companies to purchase equipment and run their businesses smoothly.
This, in turn, could force such U.S. companies to block technology spending and potentially put brakes on massive transformation projects, thus bringing a lot of revenue to IT outsourcing in India.
U.S. companies have half of revenue, or between $3 billion and $16 billion, which is the Big Five.
Trump’s retaliatory tariffs could also lead to higher prices for banks around the world to lower loan rates, making it expensive for businesses to invest money in technology projects.
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“Given the market likes certainty, the top five will better provide conservative guidance than not giving guidance at all,” said Pramod Gubbi, investment manager at Marcellus.
“Obviously, tariffs will cause a lot of macro pain in the near future of the U.S. economy and global economy. The guidance of IT service provider programs will be placed in some way on some improvement in spending, but if U.S. GDP is at risk, then all willing enjoy all willingness and all spending will be subject to prudent (IT) spending,” Gubbbi said. ”
Apparently nervous
At least three brokerage firms (Kotak Institutional Stocks, JM Financial and Motilal Oswal Financial Services) lowered their fiscal 26-year growth forecast for India’s top five IT outsourcing ahead of Trump’s tariff announcement.
“At best, the top five will give a conservative stance, but at worst, they may delay it as much as they did during Covid,” said Abhishek Pathak, chief analyst at Motilal Oswal IT Services.
The day after Trump announced India’s 27% tariff on exports to the U.S. (recalibrated 26%), the Nifty IT index reflects tensions in India’s IT sector, down 3.58% to 33,511.40 points, while the benchmark Nifty 50 meter ended 1.49% on Friday.
TCS, India’s largest IT services company, has lost 7% on NSE since Trump launched tariffs on Thursday morning, April 2 (April 3). Infosys, Hcltech, Wipro and Tech Mahindra shares fell 4.97%, 6.57%, 5.92% and 5.13%, respectively, ending April 3 through Friday.
Uncertainty about U.S. tariff announcements have been eliminated over the past three days ₹The market value of India’s five major IT outsourcing companies is US$812.2 billion.
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For the just-concluded fiscal year, TCS should also be able to record a 4.6% revenue increase, even if revenue is not considered in the fourth quarter. Infosys and HCLTECH are expected to grow up to 5% in terms of sustained currency in fiscal 25.
Wipro’s management hinted that in a constant currency manner, revenue in FY25 fell by 1% and rose by 1%, which would be better than the 4.4% drop in FY24.
TCS will start the profit season on April 10, and then Wipro starts on April 16. Infosys plans to announce its fourth-quarter and full-year results the next day, HCLTECH will announce on April 22, followed by Tech Mahindra two days later.
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