Can Infosys and Wipro beat the gloom? Three big signals to watch in Q4 earnings

After Tata Consultancy Services (TCS), India’s largest IT company, announced its results last week, two Bengaluru-based large IT companies— Wipro and Infosys —are all set to share their full-year performance. Last week, TCS gave out mixed signals. It acknowledged the heightened uncertainty in the ongoing global trade disruption, but the company’s management was hopeful of FY26 being better than FY25. While Wipro is all set to announce its results on Wednesday, Infosys will be giving out its numbers on Thursday.

Here are the Top 3 things to watch out for:

Revenue guidance for FY26

In the first nine months of FY25, Infosys has posted revenues at $14.5 billion, growth of 3.9% year-on-year (YoY), and has guided full-year revenue growth of 4.5-5% in constant currency terms, with an operating margin of 20-22%. Wipro, on the other hand, with around $8 billion in revenue till date, has provided a quarterly sequential growth guidance range of -1% to 1% in constant currency terms. While Infosys provides an annual growth guidance number to its investors, Wipro provides quarterly guidance. For the fourth quarter, given seasonal headwinds, brokerages like Nuvama and HSBC expect a drop in sequential growth but a strong exit for the full year. HDFC Securities expects Infosys to guide 2-4% growth for FY26, while for Wipro, it expects the sequential Q1 FY26 guidance to be in the range of 1% to 1.5%. Nomura also expects Wipro to guide -1.5% to 0.5% QoQ revenue growth for Q1 FY26, while for Infosys, it expects a 2-5% YoY revenue growth in constant currency terms, with a stable 20-22% EBIT margin band.

Management commentary on demand

With the U.S. being in the eye of a storm, industry watchers will be keenly watching the management commentary for both companies. What the companies have to say on the demand outlook, client response to the ongoing global trade disruption, discretionary spend outlays, contracts of the U.S. federal government, and visas, among others, will be the hot topics to watch out for. HDFC Securities, in a report dated April 4, said, “The IT sector is anticipated to report a weak exit for FY25E and provide unexciting guidance for FY26E amid rising global uncertainty. The macroeconomic slowdown has become a baseline scenario, with lower discretionary spending and elongated deal cycles impacting the pace of recovery.” In such a scenario, any positive commentary from the management could provide the markets with something to cheer for.

People strategy and order book

Even as the IT industry is going through structural changes in its people strategy, with AI and automation now being critical to cost optimisation and efficiency measures within organisations, the hiring outlook will be one thing to watch out for. While the IT industry became a net hirer after the 2023-24 hiring slump, all eyes will be on the closing headcount for the year. As of the end of Q3FY25, Infosys had a total of 323,379 employees, a small uptick compared to 322,663 in Q3FY24, while Wipro’s headcount at the end of Q3FY25 stood at 232,732 compared to 239,655 for the corresponding quarter of the previous year.

In terms of the order book, Wipro—which has seen patchy bookings for deals that are greater than or equal to $30 million in total contract value terms—announced in the last quarter the closure of 17 large deals with a total value of $1 billion across markets and sectors. Meanwhile, in the first nine months of FY25, Infosys disclosed that it had won 72 large deals with a total contract value of $9 billion, of which 55% were net new deals. Infosys CEO & MD Salil Parekh, during the January analyst call, was optimistic about how the year would end, given that the pipeline for large deals looked robust. Kotak Institutional Securities, in its sectoral report dated April 4, said that it expects the spending on managed services to be more resilient than the spending on discretionary services. However, the higher exposure to discretionary spending for both Infosys and Wipro could make them a tad vulnerable in a weak demand environment.