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India’s HCL Technologies and Tech Mahindra Reveal Outlook for IT Industry

India’s software giants HCL Technologies Ltd. and Tech Mahindra Ltd. are set to reveal their quarterly earnings next week, giving a clearer picture of where the South Asian IT and software industry is headed.

According to a note by Jefferies analysts Akshat Agarwal and Ayush Bansal, overall quarterly revenue for India’s IT services companies is expected to fall by 0.6% on a sequential basis. A seasonal slowdown is seen as the primary reason behind the dip, though a weaker US dollar may slightly cushion the impact for companies with higher exposure to Europe such as HCL Technologies, Tech Mahindra, and Coforge Ltd.

Tata Consultancy Services Ltd. (TCS), the country’s largest IT services provider, has already reported a drop in sales for the June quarter on a constant currency basis. The company cited global geopolitical tensions and ongoing tariff wars as key factors behind the decline.

Looking ahead, Jefferies expects deal activity to continue at a steady pace, as clients remain focused on using software to boost operational efficiency. However, the note also mentioned that “discretionary IT spending remains under pressure.”

In global developments, Taiwan Semiconductor Manufacturing Co. (TSMC) will remain in focus after the US Senate passed a tax bill that could lower the cost of building new chip plants. TSMC could benefit from a 35% investment tax credit if it begins construction before the 2026 deadline. The chipmaker reported stronger-than-expected sales for the June quarter, with revenue jumping 39%, boosted by increased spending on AI.

Key Earnings to Watch:

Monday – HCL Technologies (HCLT IN):
HCL may post better results than its peers, supported by its engineering and R&D units. The company previously stated that AI-driven efficiency gains are showing results, and hiring may not rise in line with revenue. According to HSBC Global Research, HCL is expected to maintain its annual revenue growth forecast of 2%–5%, which is higher than that of many competitors.

Tuesday:
No major earnings are scheduled.

Wednesday – Tech Mahindra (TECHM IN):
Tech Mahindra’s net income for the first quarter is expected to have risen 38%, marking the slowest growth in the past three quarters. Kotak Institutional Equities highlighted that key factors to monitor include the company’s efforts to improve margins to 15% by FY2027 and its revenue turnaround strategy.

Thursday – Axis Bank (AXSB IN):
The bank’s net interest margin is projected to decline from the previous quarter, reflecting the impact of the Reserve Bank of India’s interest rate cuts. According to ICICI Securities, Indian banks are expected to keep a tight grip on operating expenses and report solid gains from treasury operations.

Friday – JSW Steel (JSTL IN):
JSW Steel’s first-quarter net profit is expected to have nearly tripled, based on consensus estimates. Challenges like weak Chinese demand and US tariffs may be balanced by strong domestic consumption, government capital spending, lower coal costs, and a temporary 12% safeguard duty on select imports, according to media

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