11-07-2025
India's HCL Technologies, Tech Mahindra Lift Veil on IT Industry Outlook
(Bloomberg) -- Indian software leaders HCL Technologies Ltd. and Tech Mahindra Ltd. will offer a peek into the South Asian tech and software sector's future when reporting earnings next week.
Quarterly sales across India's computer services and IT firms are projected to have slid 0.6% sequentially, Jefferies analysts Akshat Agarwal and Ayush Bansal said in a note previewing the sector.
Softer seasonal performance is seen as the main drag on earnings, though could be partly offset by US dollar depreciation boosting firms like HCL Technologies, Tech Mahindra, and Coforge Ltd., who have a higher exposure to Europe.
On Thursday, Tata Consultancy Services Ltd. posted a decline in sales for the first quarter through June on a constant currency basis, weighed by tariff wars and global geopolitical turmoil.
Looking ahead, deals are likely to continue at a steady pace as clients keep looking at software solutions to optimize operations, Jefferies said, though noting that discretionary IT spending remains under pressure.
Meanwhile, Taiwan Semiconductor Manufacturing Co.'s US expansion plans will be in focus after the Senate's passed a tax bill that would make it cheaper for chipmakers to build plants there. TSMC will be eligible for an investment tax credit of 35% if it breaks ground on new plants before a 2026 deadline.
TSMC on Thursday reported June quarter sales, which rose a better-than-anticipated 39%, helped by an AI spending boom.
Highlights to look out for:
Monday: HCL Technologies (HCLT IN) may show better growth than its peers, aided by its research & development and engineering divisions. The company said last quarter that it was seeing efficiency gains from AI, and hiring may not grow in line with revenue. HSBC Global Research said the company is unlikely to revise its annual revenue growth forecast of 2%-5%, which is higher than the projections made by rival IT firms.
Tuesday: No major earnings of note.
Wednesday: Tech Mahindra's (TECHM IN) first-quarter net income likely rose 38%, the slowest pace in three quarters. Key areas to watch include the company's measures to improve its margins to 15% by fiscal year 2027 and its turnaround efforts to boost revenue, according to Kotak Institutional Equities.
Thursday: Axis Bank's (AXSB IN) net interest margin should decline from a quarter ago, reflecting the impact of the Indian central bank's interest rate cuts. The country's banks in general are likely to sustain their control on operating expenditures and are seen reporting strong treasury gains, according to analysts from ICICI Securities.
Friday: JSW Steel's (JSTL IN) first-quarter net income almost tripled, consensus shows. Price pressures linked to weaker China steel demand and US tariffs could be offset by robust demand on domestic consumption and government capex, lower coal costs and a 12% temporary safeguard duty on some imports, BI said.
--With assistance from Pradeep Kurup and Cindy Wang.
More stories like this are available on
