Stories
BNP Paribas Predicts Muted IT Earnings and Guidance Resets for Largecaps
- •India's largecap IT services companies are projected to post less than 1 percent organic sequential revenue growth for the September quarter.
- •BNP Paribas expects Infosys and HCLTech to lower their organic growth guidance due to softer demand conditions and lack of seasonal volume pickup.
- •Infosys organic growth midpoint guidance is expected to be cut by 25 basis points, while HCLTech organic midpoint guidance could drop by about one percentage point.
- •Tech Mahindra is anticipated to continue outperforming its peers with mid-single-digit revenue growth supported by broader improvements.
- •The Nifty IT index is forecasted to trade between 26,000 and 31,000 as macro challenges continue to limit prospects of a full demand rebound.
Key Questions Answered
BNP Paribas expects largecap IT services companies to report another muted quarter with less than 1% organic sequential revenue growth. The September quarter failed to deliver the typical seasonal volume pickup, reflecting continued softer demand conditions.
BNP Paribas expects Infosys and HCLTech to lower their organic growth guidance for the financial year 2027. Infosys's midpoint organic growth guidance is expected to be cut by about 25 basis points, while HCLTech's organic midpoint guidance could be reduced by roughly one percentage point.
Despite a cautious outlook for the sector, BNP Paribas continues to favor Tech Mahindra. The brokerage expects the company to deliver mid-single-digit revenue growth supported by improvements across verticals, geographies, service lines, and long-term contract value.
