LTIMindtree, TCS, other IT shares rise up to 3% ahead of Q2 results season; here's what analysts expect
The shares of IT companies jumped in trade on October 6 before the results season begins for the second quarter of FY26. The sharp rise in the share prices pushed the Nifty IT index up nearly 2 percent to emerge as the top sectoral gainer on the market today.
The IT index rose to 34,556.15, extending gains for the third consecutive session. The index has now gained nearly 3 percent (more than 900 points) in these three sessions so far.
Top IT gainers today:
LTIMindtree shares gained nearly 3 percent, while Persistent Systems and Tata Consultancy Services (TCS) shares jumped more than 2 percent each. Coforge, Tech Mahindra and Mphasis shares rose around 2 percent each, while HCL Tech shares were up over 1 percent.
Infosys and Wipro shares, meanwhile, gained around 1 percent each. The rise in the share prices comes after the stocks sharply fell following US President Donald Trump's recent announcements on H-1B visas.
The earnings season is set to begin in a few days, with TCS opening the season for the IT pack. The company will release its results for the July-September quarter of the ongoing financial year on October 9. Tech Mahindra and Persistent Systems will announce their respective results on October 14, while Infosys and LTIMindtree will do so on October 16.
What analysts expect?
HDFC Securities said the IT sector is expected to report subdued revenue growth in an otherwise seasonally strong quarter, as persistent global macroeconomic uncertainty and recent US tariff measures continue to dampen discretionary spending. "The recent H1B visa fee hike is unlikely to cause near-term disruptions, but it is expected to alter delivery models by increasing onsite costs and accelerating offshoring trends over time," it said.
"Margins for the quarter should see some support from the rupee’s depreciation, which will help offset the impact of selective wage hikes, even as hiring trends remain muted across the sector. Against this backdrop, we maintain our cautiously optimistic outlook and remain selective, with a preference for Infosys, HCL Tech among tier-1 players and Persistent Systems, Tata Elxsi, and Mastek in the mid-tier segment," it added.
Elara Capital said that the clients of these IT companies continue to feel tariff-related pressure and uncertainty from new H1-B visa regulations. "The IT industry has reduced its dependence on H1-B visas over the years, so any dependence may be limited to 10-15% of its onsite workforce. However, this may create a near-term headwind regarding deal signing with some delay on that front. Clients are not willing to commit any incremental dollars due to tough macro and passing on productivity gain to client has been an industry norm now. Deals are competitive while companies are focusing on sustaining margin," it said.
"We expect Infosys and HCL Technologies to retain FY26 revenue growth guidance of 1-3% and 3-5%, respectively," it added, while noting that it expects mid-caps to likely continue outperforming the large caps during the quarter under review.
The IT Services sector is anticipated to report moderate growth in Q2FY26, said Axis Securities. This comes amid a lack of improvement in demand, a steady deal pipeline, and uncertainties in macroeconomic conditions such as Trump tariffs, H1-B visa restrictions, the proposed US HIRE bill, and the ongoing trade war.
"The recent price correction in large- and mid-cap stocks has created an attractive risk-reward setup for investors, with valuations turning more reasonable and offering fresh opportunities," the domestic brokerage noted.
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