HCL Technologies Ltd., Wipro Ltd. and Tech Mahindra Ltd. are set to report earnings as their investor base increasingly questions the value of traditional IT services in the age of artificial intelligence.
The sector is weighed down by macroeconomic uncertainty, exacerbated by the Middle East conflict, and the disruptive impact of AI adoption. The twin pressures have weighed on sentiment, driving down shares this year.
Negative sentiment toward the sector deepened after US-listed peer Accenture Plc forecast slower-than-expected quarterly revenue, reinforcing concerns over weakening demand and sending the NSE IT Index even lower. On Thursday, Tata Consultancy Services Ltd. met net income expectations, helped by cost-cutting efforts that helped it weather a slowdown in the core IT business.
“Our recent interactions suggest that pressures on IT services budgets persist, which is driving pressures on discretionary IT spending,” Jefferies wrote in a note.
Earnings at Taiwan Semiconductor Manufacturing Co. will serve as a key reality check for Taiwan’s stock market, which remains in the grip of the AI boom. It will release its June sales figures on Monday afternoon after Typhoon Bavi delayed its announcement, giving investors a clearer look on its second-quarter performance.
On Saturday, India’s Avenue Supermarts Ltd. missed net income estimates. It refocused its e-commerce strategy by shutting operations in several cities that didn’t contribute much to the group’s earnings.
Highlights to look out for:
Monday: HCL Technologies’ (HCLT IN) quarterly revenue is expected to have risen 13%. Margins may have improved on rupee depreciation and cost-saving measures, according to Elara Securities. The company is expected to maintain its full-year growth guidance in constant-currency terms of 1% to 4%.
Tuesday-Wednesday: No notable earnings.
Thursday: TSMC’s (2330 TT) second-quarter net income is set to grow 57% to reach another record. Watch for next quarter’s guidance and margin outlook in the second half as US fab costs build, said BI. JPMorgan expects the semiconductor giant to see better visibility on AI demand and firmer pricing into 2028.
Tech Mahindra (TECHM IN) should continue expanding operating margins, a result of its ongoing cost-cutting program. Revenue growth was led by the ramp-up of a large deal in the telecommunications sector, Axis Securities said.
Wipro’s (WPRO IN) first-quarter revenue growth was helped by its acquisition of Harman’s digital transformation solutions business, which closed in December. Markets will also look for cues on further acquisition plans, as well as integration of recently acquired businesses.
Friday: Reliance Industries (RELIANCE IN) first-quarter earnings were supported by steady performance in the retail segment and a rebound in the oil-to-chemicals business, said Systematix Institutional Equities. The Jio Platforms digital and telecommunications arm looks set to be India’s largest initial public offering after filing listing documents last month, BI said.
JSW Steel (JSTL IN) should post a sequential slide in revenue as sales volumes dropped in the wake to the Middle East conflict. Steel firms also likely experienced higher coking coal costs, offset by higher price realisation, Nuvama said.
