TCS vs Infosys vs Wipro: What Q4 results, guidance & commentaries signal

The first week on quarterly earnings saw earnings from three domestic IT majors including Tata Consultancy Services (TCS), Wipro and Infosys- as all of them disappointed investors with a muted set of earnings. Kicking-off with TCS, Infosys called it a wrap for the earnings week on Thursday, ahead of markets holiday on Friday on the account of Good Friday.

IT earnings have remained disappointing in the terms of revenue growth, margins and the most-management guidance amid the Trump tariff concerns and anticipation of economic slowdown in the US. Despite meeting the analysts' expectations in Q4, the earnings for IT majors have remained a miss for the domestic software exporters.

Amid a slew of weak Q4 results by the IT companies, brokerage firms have lowered their earning target multiples, leading to a cut in the target prices, with downgrades for select stocks. However, a few have maintained their previous ratings on the IT stocks, post the sharp beating of IT stocks in the last few weeks. Upgrades for the IT stocks have remained a rare phenomenon.

The muted Q4FY25 performance by the IT majors so far indicate that the worst might not be over a year. On one hand, the demand outlook continues to remain bleak, while worries over economic growth on the back of high interest rate, sticky inflation and tariff policies may haunt in the coming few quarters as well.

The IT sector seems to be at a turning point, facing uncertainty driven by Trump’s tariffs, an economic slowdown, and the growing influence of artificial intelligence (AI). While experts anticipate that the financial year 2025–2026 may be marginally better than the previous one, they also warn it will remain a challenging period.

Tata Consultancy Services Tata Consultancy Services: The IT solutions player reported a 1.3 per cent YoY fall in its consolidated net profit at Rs 12,224 crore, while its revenue rose 0.8 per cent YoY to Rs 64,479 crore. Ebit declined 0.4 per cent YoY to Rs 15,601 crore, while margins dropped 30 bps YoY to 24.2 per cent. The company, with TCV at $12.2 billion, also announced a dividend of Rs 30 per share.

TCS reported a revenue, slightly below expectations, impacted by ramp down of the BSNL deal, said Antique Stock Broking. Growth was impacted by regional markets, international business grew 0.6% QoQ despite a challenging macro environment. Management highlights witnessing some softness in US consumer, retail, insurance, and auto segments due to the recent tariff concerns, it said.

FY26 client budgets remain flat, with discretionary spending being postponed rather than cut. Company maintained its guidance of FY26 to be better than FY25 for international business on strong deal bookings and expectations of many organizations must undergo tech transformation. We find the current valuation appealing and with growth projected to gradually pick up, it said, upgrading the stock to 'buy' with a target price of Rs 4,150.

TCS missed estimates in terms of revenue, Ebit margins and profit, said Sharekhan. Order book TCV was strong and broad-based at $12.2 billion, up 20 per cent QoQ, while book-to-bill stood at 1.6 times. Demand environment remains cautious due to global uncertainties, particularly around tariffs, but a strong order book and AI/GenAI traction provide optimism for FY2026, it said.

"TCS remains well positioned to capture opportunities across cost optimisation and business transformation, given its strong domain knowledge, digital, and GenAI capabilities. We have cut our EPS estimates by 5.4 per cent/4.5 per cent for FY26/FY27, respectively, factoring in the heightened uncertainty in the near term," it said with a 'buy' rating and a target price of Rs 4,050.

Infosys Infosys reported a net profit of Rs 7,033 crore in the March 2024 quarter, rising 3.1 per cent on a sequential basis, but down 11.75 per cent YoY. Revenue from operations dropped 2 per cent QoQ but rose 7.9 per cent YoY to Rs 40,925 crore. Ebit for the quarter came in at Rs 8,575 crore for the reported quarter. The IT major also announced a dividend of Rs 22 per share.

Infosys’s Q4FY25 revenue decreased 3.5 per cent CC QoQ, significantly below estimates. EBIT margin at 21 per cent QoQ was better than estimates. Management gave FY26 revenue growth guidance of 0–3 per cent and margin guidance of 20–22 per cent. TCV came in at $2.6 billion, Nuvama Institutional Equities said.

"The weak Q4 results were driven by lower third-party revenue (two– thirds of fall)—implying a quarter broadly in-line with estimates. The guidance exudes management confidence in trying to mitigate the weak macro. We are trimming FY26E/27E EPS by 3.7 per cent/4.6 per cent, on Q4 miss," it added with maintaining a 'buy' rating but a lower target price of Rs 1,700.

The upper end of Infosys' guidance assumes a ‘stable to marginally improving environment’, according to management, said Motilal Oswal, who  found this to be notably positive. Management also guided for normal seasonality, indicating little to no impact from current macro uncertainties on Q1 revenues—unlike peers, it noted.

"Pass-through revenues for FY26e could be materially lower, and this could provide a good lever for margin expansion in FY26e. We have made minor adjustments to our FY26/FY27E estimates to reflect the current macro environment and trends in discretionary spending. It has maintained its margin guidance of 20-22 per cent," it said with a 'neutral' rating and a target price of Rs 1,600.

Wipro The IT solutions major reported a 6.6 per cent YoY rise in its net profit at Rs 3,588.1 crore with a 0.7 per cent increase in revenue at Rs 22,445.3 crore in the March 2025 quarter. IT services EBIT inched 0.7 per cent YoY to Rs 3,927 crore, while its EBIT margins remained flat at 17.5 per cent for the quarter. The company did not declare any dividend in the March 2025 quarter.

Wipro has delivered solid performance on large deals and margin execution. However, caution prevails due to continued growth weakness, lower ACVs, and lower discretionary spends along with macro uncertainty. A weak revenue growth guidance for 1QFY26E supports this argument, said Nirmal Bang Institutional Equities.

"To factor in the near-term weakness and weak guidance, we cut our FY26/27 US dollar revenue estimates by 3 per cent/2.4 per cent and maintain margins. While margins are improving, sustained growth recovery and large deal ramp-ups will be key to a rerating. We maintain our 'hold' rating on Wipro with a target price of Rs276," it added.

Wipro’s outlook appears challenging due to macroeconomic uncertainty and tariff policies by the US, leading clients to curb discretionary spending and delay major transformation projects. This cautious sentiment, reflected in Q1FY26 guidance, may pose headwinds to the company’s positive growth prospects in FY26, said Choice Broking.

"The company’s success hinges on leveraging its AI and consulting strengths and improving performance in key markets. Consequently, we have downgraded our rating to 'reduce' and lowered the target price to Rs 252 implying a PE of 19 times, based on FY27E EPS of Rs 13.3," it added.