IT stocks Q2 results analysis: India’s largest IT companies are showing signs of recovery, with most delivering stronger profits and deal bookings while some struggle with sluggish client spending and pressure on revenue growth.
The September quarter (Q2FY27) results of Tata Consultancy Services (TCS), Infosys, Wipro, HCLTech and Tech Mahindra reveal a widening gap in performance, particularly in constant-currency growth, artificial intelligence (AI) monetisation and future revenue visibility.
While Tech Mahindra led profit and revenue growth, HCLTech stood out for raising its growth guidance, Infosys announced the highest interim dividend, and TCS retained its lead in deal bookings and AI revenue scale. Wipro, meanwhile, faced pressure on profitability and new business wins.
Q2 results comparison: Who won on profit and revenue growth?
Net profit: Tech Mahindra emerged as the strongest performer in year-on-year profit growth, with net profit surging 32.7% to ₹1,586 crore. HCLTech followed with a 21.2% increase to ₹5,132 crore, its highest-ever quarterly net income. TCS reported a 15% rise to ₹13,884 crore, while Infosys posted a more modest 6% increase to ₹7,823 crore. However, Wipro’s consolidated net profit declined 1.4% to ₹3,200.6 crore, making it the only company among the four to report a year-on-year profit decline.
Revenue growth: Tech Mahindra also led year-on-year revenue growth, with consolidated revenue increasing 15.6% to ₹16,180 crore. HCLTech recorded an 11.52% rise to ₹35,620 crore, narrowly ahead of Infosys, which reported an 11% increase to ₹49,244 crore. Meanwhile, TCS revenue grew 11.2% to ₹73,188 crore, the highest in absolute terms among the five companies. Wipro’s gross revenue rose 9.1% to ₹24,752.7 crore, although its core IT services business continued to experience muted growth.
Constant-currency revenue: Tech Mahindra led the reported constant-currency performance, with growth of 7.2% year-on-year and 2.4% quarter-on-quarter. HCLTech followed with 2.3% sequential growth, while Infosys reported 1.2% sequential growth. TCS recorded a more subdued 0.5% quarter-on-quarter increase, whereas Wipro’s constant-currency revenue growth stood at just 0.6% year-on-year, highlighting continued weakness in underlying client demand.
AI revenue and deal wins: Which IT company gained an edge?
AI revenue: TCS led in AI revenue scale, reporting an annualised AI revenue run rate exceeding $3.1 billion, with AI contributing more than 10% of its revenue. Infosys said AI accounted for 10.5% of total revenue, growing 29% sequentially. HCLTech reported $219 million in advanced AI revenue, representing nearly 6% of total revenue and 78% year-on-year constant-currency growth. Wipro did not disclose a standalone AI revenue figure.
Deal wins: TCS secured the largest total contract value (TCV) of $9.6 billion, providing substantial forward revenue visibility despite falling short of internal expectations. Infosys won large deals worth $5.2 billion, including a mega deal exceeding $2 billion, with 62% of the total comprising net new business. HCLTech recorded $3.26 billion in new bookings, supported by a landmark multi-year deal worth $1.14 billion. Tech Mahindra reported contract wins of $1.02 billion. Wipro’s total deal bookings declined to $2.6 billion from $4.7 billion a year earlier, making it the weakest performer on this measure.
Guidance comparison: Which company is most confident about growth?
Revenue and margin guidance: HCLTech emerged as the most optimistic, raising the lower end of its FY27 constant-currency revenue growth guidance to 2.5%-4% from 1%-4%, while retaining its EBIT margin forecast of 17.5%-18.5%. Infosys moved in the opposite direction, cutting its FY27 revenue growth guidance to 1%-2% from 1.5%-3%, citing pricing pressure and customers’ productivity demands, while maintaining its operating margin outlook at 20%-22%.
Wipro projected sequential constant-currency revenue growth of -1.5% to 0.5% for Q3 FY27. TCS and Tech Mahindra did not provide explicit numerical revenue guidance, although Tech Mahindra reiterated that it remained on track to achieve its 15% EBIT margin target.
Dividends and corporate actions: Who rewarded shareholders?
Dividends: Infosys announced the highest interim dividend among the five companies at ₹26 per share. Tech Mahindra declared ₹15 per share, while TCS and HCLTech each announced an interim dividend of ₹12 per share. Wipro did not declare an interim dividend for the quarter.
Other corporate actions: Tech Mahindra stood out by approving a 1:1 bonus share issue, subject to board approval. Meanwhile, TCS completed its acquisition of German industrial consulting firm MHP for EUR 320 million to strengthen its automotive capabilities. Wipro expanded its AI portfolio through its 20% stake acquisition in FLARRE.AI.
Overall, Tech Mahindra led profit and revenue growth, TCS dominated deal bookings and AI revenue scale, and HCLTech delivered the strongest improvement in growth guidance. Infosys led on dividend payout, while Wipro faced the greatest pressure across profitability and deal wins.
Disclaimer: This story is for educational purposes only. Please consult with an investment advisor before making any investment decisions.
