India Technology: IT Services: Lowering estimates for large caps; downgrade TCS to EW; prefer mid-caps

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India Technology: IT Services: Lowering estimates for large caps; downgrade TCS to EW; prefer mid-caps

IdeaPreviewMto earnings

Focus KPI Focus KPI Surprise Likely impact to consensus EPS*

Tata Consultancy Services TCS.NS

Deal win TCV In-line Largely unchanged

• Expect muted growth in deal wins and cautious commentary on the near-term outlook for 2Q.

• Weak margins in 1Q could put assumption of flat margins at risk in F27.

Infosys Limited INFY.NS

F27 revenue growth guidance Likely downside surprise Modest revision lower

• Expect Infosys to lower revenue growth guidance range for F27.

• Maintain margin guidance band but YoY margins could be lower in F27.

• Large deal wins could be tepid given delayed decision-making cycle.

HCL Technologies HCLT.NS

Deal win TCV In-line Modest revision lower

• Expect weak 1Q revenue growth.

• F27 revenue guidance range could be maintained.

• Consensus estimates could still drop.

Tech Mahindra Limited TEML.NS

• Expect good start to F27 relative to peers.

• Management likely to maintain F27 revenue growth and margin outlook.

Wipro Ltd. WIPR.NS

2Q revenue growth guide Likely downside surprise Modest revision lower

• Expect 2Q revenue growth guidance to surprise negatively.

• 1Q margins could fall below management's aspirational range of 17-17.5%.

Coforge Ltd COFO.NS

Executable Order Book In-line Largely unchanged

• We don't expect any negative surprise on QoQ growth trajectory and expect it to pan out, per management.

• Management is reducing India-based business, the impact of which will come in 1QF27.

LTIMindtree Limited LTIM.NS

• Our expectation for QoQ revenue growth is lower than at the start of the quarter.

• This is because of continued macro issues, especially in the Middle East.

• We expect deal wins to be in line.