India’s IT giants HCL Technologies and Tech Mahindra, based in Uttar Pradesh and Maharashtra respectively, are set to report earnings this week, offering key insights into the outlook of the country’s IT services sector. This comes shortly after Tata Consultancy Services reported a dip in its first-quarter performance due to global economic uncertainties and reduced client spending.
As global client spending remains cautious, two of India’s leading IT services providers — HCL Technologies Ltd. headquartered in Noida, Uttar Pradesh, and Tech Mahindra Ltd. based in Pune, Maharashtra — are set to release their quarterly earnings this week. These results are expected to offer a deeper understanding of the Indian IT sector’s direction, especially after a downbeat performance by sector leader Tata Consultancy Services Ltd. (TCS).
On July 11, TCS reported a 3% annual decline in sales for the first quarter ending in June, citing cautious technology spending due to global trade tensions and geopolitical uncertainty. This signals continued pressure on the Indian tech services industry, raising concerns about its recovery timeline.
According to analysts from Jefferies, the overall quarterly sales for Indian IT firms are projected to have slipped by 0.6% sequentially. A soft seasonal performance is considered the primary cause, although the depreciation of the US dollar may slightly benefit companies with stronger European exposure like HCL Technologies and Coforge Ltd..
On July 15, HCL Technologies is expected to show relatively better growth than peers, driven by its R&D and engineering strengths. The company has been leveraging AI for efficiency gains, potentially allowing it to sustain revenues without proportionately increasing its workforce. Analysts at HSBC Global Research do not expect a revision in HCL’s annual revenue growth forecast of 2%–5%, a range higher than most of its competitors.
Tech Mahindra’s earnings are scheduled for July 17. Analysts at Kotak Institutional Equities expect its net income to have grown 41% year-over-year, though at a slower pace than previous quarters. Key indicators include margin improvement initiatives aimed at hitting 15% by FY2027 and ongoing turnaround strategies.
Meanwhile, broader sectoral shifts are also being shaped by global events. For instance, Taiwan Semiconductor Manufacturing Co. (TSMC) recently benefited from a 39% rise in June quarter sales, fueled by AI demand, and will gain further from a new U.S. tax credit for chip plant investments.
Looking beyond the tech sector, India’s financial and steel sectors also have major updates lined up this week. On July 18, Axis Bank is expected to post a decline in net interest margin, reflecting the Reserve Bank of India’s rate adjustments. On July 19, JSW Steel is forecasted to report a threefold jump in net income, driven by strong domestic demand and strategic tariff protections.
As earnings season unfolds, the performance of India’s key IT players like HCL Technologies and Tech Mahindra will be closely watched as indicators of where the country’s tech economy is headed amid ongoing global headwinds.
