Infosys, HCL Tech, TCS, other IT stocks fall as Wipro’s weak Q1 guidance signals tough time ahead

Information technology (IT) stocks witnessed sharp selling on Thursday, with all index heavyweights sinking in red as Wipro’s weak guidance after its March quarter results left investors jittery. The Bengaluru-headquartered company, in its earnings call, said that client spending deteriorated toward the end of the March quarter, and the coming quarter (Q1 FY26) could see further impact.

For Q1 FY26, Wipro has slashed its IT Services revenue to be in the range of $2.51 billion to $2.56 billion, or between ₹21,400 crore and ₹21,926 crore, a sequential decline between 3.5%-1.5% in constant currency terms.

Weighed down by weak guidance, Wipro shares dropped as much as 6.2% to ₹232.20 in the first hour of trade so far. The stock is down 28.5% from its 52-week high of ₹324.55 touched on January 23, 2025, while it hit its 52-week low of ₹208.40 on June 4, 2024.  

Infosys share price also dropped nearly 2% as investors turned cautious ahead of its March quarter results slated to be released post market hours today.

In a similar trend, HCL Tech shares declined as much as 3.3%, while sectoral leader Tata Consultancy Services (TCS) slipped 1.6%. Among others, LTI Mindtree , Tech Mahindra , L&T Technology Services, Persistent Systems , and KPIT Technologies shares fell in the range of 2-4%.

Meanwhile, the BSE IT index was down 2%, while the equity benchmarks BSE Sensex and Nifty were trading marginally lower, paring early losses.  

Tariffs And Macro Uncertainty Prompt Weak Q1 Guidance

The management of Wipro intends to keep margins close to current levels but is facing headwinds from a weak growth environment and large deals implementation cost in H1, Motilal Oswal said in a note. The brokerage, however, expects to catch up on growth in H2 FY26, as some of large deals will ramp up in H2 (especially Phoenix deal).

“Management guided for Q1 revenue growth to be between -3.5% and -1.5% QoQ – sharply below expectations,” it said in a note. The management attributed weak guidance to client delaying spending amid increased macro uncertainty.

Nuvama, in a report, said that a soft guidance of 3.5% to 1.5% QoQ revenue decline reflects temporary freeze on client budgets. The brokerage said that it would be too early to predict if the situation will become immediately better in 2Q. However, it believes Q1 FY26 could be a quarter of declining revenues for Wipro and other large-caps overall. “A poor exit in Q4 and the implied decline in Q1 drive our expectation of 1.9% YoY cc revenue decline in FY26E,” it noted. 

According to analysts, aggressive tariff measures by the U.S. President Donald Trump’s administration have raised concerns about slowing economy and sticky inflation. Adding to the woes, the persistent uncertainties about the global trade scenario, amid flip-flops on tariff policies by President Trump, have deterred clients from signing large deals.

BSE IT Index Down 25% YTD Amid Tariff Concerns

India’s IT sector has already seen sharp correction in the calendar year 2025, with BSE IT index falling over 25% amid concerns that plethora of tariffs imposed across various sectors could result in economic sluggishness in the U.S., from where major companies such as TCS, Wipro, Infosys, and others generate huge revenues.

There is fear in the market that if U.S. economy slows down due to trade restrictions, demand for Indian IT services could be hit as it would result in drop in IT spending by American companies, especially in banking, financial, and retail sectors.

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