TCS, Infosys, HCLTech: Tier-1 IT services companies post single-digit topline growth in Q1 FY26

Management commentary painted a mixed picture; caution prevailed, yet industry CEOs also emphasised cost optimisation, vendor consolidation, and opportunities in AI makeovers.

An overview of Q1 report cards of Indian IT giants shows year-on-year (YoY) revenue growth ranging from 0.8% (for Wipro) to 8.1% (HCL Technologies).

Nuvama Institutional Equities expects the demand environment to remain challenging for the next one or two quarters due to macro uncertainty.

"However, we remain positive on the medium-to-long-term outlook, as technology debt is very high for enterprises, which will warrant revival in spending as macro improves," Nuvama said in its report post-Infosys' results, which concluded the Q1 earnings season for Tier-1 IT services firms.

TCS' revenue rose 1.3% year-on-year to ₹63,437 crore, while the bottom line improved 5.9% to ₹12,760 crore.

TCS MD and Chief Executive K. Krithivasan said the company is experiencing a "demand contraction" due to the continued uncertainties on the macroeconomic and geopolitical fronts and added that he does not see double-digit revenue growth in FY26.

Krithivasan explained the delays in decision-making experienced in the preceding quarter have "intensified" now and hoped the discretionary spending—a prime mover of revenue growth for IT companies—would return once the uncertainties ebb.

For Bengaluru-headquartered Infosys, revenue was up 7.5% to ₹42,279 crore, while net profit at ₹6,921 crore translated into an 8.6% growth.

Wipro's topline grew 0.77% in Q1 to ₹22,135 crore, but its profit rose at a faster 9.8% clip to ₹3,336.5 crore.

On a positive note, Infosys secured large deals worth $3.8 billion and raised the lower end of its FY26 revenue growth guidance to 1-3%, from 0-3% earlier.

Infosys CEO Salil Parekh, however, expressed caution and said while the economy worldwide has come to more stable situations, "it is not fully settled."

Industries such as logistics, consumer products, and manufacturing were impacted by economic changes in the economic environment, the company's management said.

Clients are reportedly highly focused on cost and efficiency, reflecting ongoing caution influenced by the macroeconomic setting.

Wipro CEO and MD Srinivas Pallia said the first quarter of the fiscal year faced significant macro uncertainty, which kept the overall demand muted. Wipro's clients prioritised initiatives with immediate impact, focusing on cost optimisation and vendor consolidation. At the same time, they accelerated their AI, data, and modernisation programs.

Pallia also noted that discretionary spending is not uniform and is coming back only in certain pockets.

Wipro's IT services segment, which forms the core of its business, generated ₹22,080 crore during the quarter under review, a marginal year-on-year growth of 0.8% and a sequential decline of 1.6%. The company has given a sequential guidance of -1% to 1% in constant currency (CC) terms.

HCL Technologies' (HCLTech) revenue was 8.1% higher at ₹30,349 crore, but profit fell 9.7% to ₹3,843 crore year-on-year, hurt by higher expenses and the one-time impact of a client bankruptcy.

The Noida-headquartered IT firm, however, raised the lower end of the revenue growth outlook for the full fiscal year on booking expectations in the coming quarters.

CEO C Vijayakumar said the June quarter was historically the weakest for the company, although the environment, with some variations, mainly remained stable and did not deteriorate as feared at the start of the quarter.

Tech Mahindra clocked 2.65% revenue growth to ₹13,351.2 crore, its profit 33.9% higher at ₹1,140.6 crore.