How India's IT Giants Navigated a Challenging Quarter Amid Global Uncertainties

India's leading IT companies reported mixed results for the April-June quarter, with revenue growth ranging from 0.8% to 8.1%. The sector faces challenges due to global economic instability and geopolitical tensions, leading to cautious client spending. While some firms like Infosys secured significant deals and raised growth forecasts, others like TCS and Wipro expressed concerns over demand contraction and decision-making delays. Industry leaders remain optimistic about long-term recovery as technology investments are expected to rise once macro conditions improve. Discover how these dynamics are shaping the future of India's IT landscape.

By Narendra Chaudhary Jul 27, 2025, 19:16 IST

Mixed Results for India's IT Sector

New Delhi: The leading IT service providers in India reported modest revenue growth for the April-June quarter, reflecting a mixed and somewhat sobering performance as global economic instability and geopolitical tensions impacted tech demand and delayed client decisions.

Comments from management indicated a cautious outlook, although industry leaders highlighted opportunities in cost optimization, vendor consolidation, and advancements in AI.

A review of the first quarter results from major Indian IT firms revealed year-on-year revenue growth ranging from 0.8% for Wipro to 8.1% for HCL Technologies.

Axis Securities, in its analysis of Infosys, pointed out that the business environment remains unpredictable due to ongoing tariff disputes and geopolitical challenges, leading clients to exercise caution in discretionary spending and delaying decisions.

Nuvama Institutional Equities anticipates that the demand landscape will remain tough for the next one to two quarters due to macroeconomic uncertainties.

"Nonetheless, we maintain a positive medium-to-long-term outlook, as enterprises face significant technology debt, which will necessitate increased spending as the macro environment stabilizes," Nuvama stated in its report following Infosys' results, which marked the conclusion of the first quarter earnings season for Tier-1 IT firms.

TCS reported a 1.3% increase in revenue year-on-year, reaching Rs 63,437 crore, while its net profit rose by 5.9% to Rs 12,760 crore.

TCS Managing Director and CEO K Krithivasan noted a "demand contraction" due to ongoing uncertainties in the macroeconomic and geopolitical landscape, expressing skepticism about achieving double-digit revenue growth in FY26.

Krithivasan elaborated that the delays in decision-making observed in the previous quarter have intensified, and he hopes that discretionary spending—crucial for revenue growth in IT—will rebound once uncertainties diminish.

Infosys, based in Bengaluru, saw its revenue increase by 7.5% to Rs 42,279 crore, with net profit rising to Rs 6,921 crore, reflecting an 8.6% growth.

Wipro's revenue grew by 0.77% in Q1 to Rs 22,135 crore, while its profit surged by 9.8% to Rs 3,336.5 crore.

On a positive note, Infosys secured significant deals worth USD 3.8 billion and raised its FY26 revenue growth guidance's lower end to 1-3%, up from the previous 0-3%.

However, Infosys CEO Salil Parekh expressed caution, stating that while the global economy is stabilizing, it is not fully settled. Industries such as logistics, consumer products, and manufacturing have been affected by economic fluctuations, according to the company's management.

Clients are reportedly prioritizing cost and efficiency, reflecting ongoing caution influenced by the macroeconomic climate.

Wipro's CEO and MD Srinivas Pallia remarked that the first quarter faced considerable macro uncertainty, which muted overall demand. Clients focused on initiatives with immediate impacts, emphasizing cost optimization and vendor consolidation while accelerating AI, data, and modernization efforts.

Pallia also noted that discretionary spending is uneven and is only returning in specific areas.

Wipro's IT services segment, which is central to its operations, generated Rs 22,080 crore during the quarter, marking a slight year-on-year growth of 0.8% but a sequential decline of 1.6%. The company has provided a sequential guidance of -1% to 1% in constant currency terms.

HCL Technologies (HCLTech) reported an 8.1% increase in revenue to Rs 30,349 crore, although profit fell by 9.7% to Rs 3,843 crore year-on-year, impacted by higher expenses and a one-time client bankruptcy.

The Noida-based IT firm, however, raised its lower revenue growth outlook for the full fiscal year based on expected bookings in the upcoming quarters.

CEO C Vijayakumar mentioned that the June quarter is typically the weakest for the company, but the environment remained stable without the anticipated deterioration.

Tech Mahindra achieved a revenue growth of 2.65% to Rs 13,351.2 crore, with profit increasing by 33.9% to Rs 1,140.6 crore.