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Kotak expects muted Q2 earnings for large Indian IT firms
The brokerage said demand has neither improved nor deteriorated since the June 2026 quarter, though it expects HCLTech to be the notable exception.
Kotak Institutional Equities expects India’s leading IT services companies to face another weak earnings season, citing persistent macroeconomic uncertainty and AI-led productivity gains that continue to pressure demand.
In a note, the brokerage said demand conditions have neither improved nor worsened since the June 2026 quarter, implying a muted outlook for tier 1 IT players even in a seasonally strong period.
Kotak attributed the expected softness to “AI deflation” and, to a lesser extent, weaker macro conditions, while projecting HCLTech to be the standout among large firms.
For the quarter, it projected HCLTech revenue to rise 2.0% quarter-on-quarter and 2.4% year-on-year, while it forecast Infosys growth of 1.1% QoQ and 0.2% YoY, and TCS growth of 0.5% QoQ and 2.8% YoY.