loader2
Login Open ICICI 3-in-1 Account
  • Text Size
  • Text to Speech
  • Color Contrast
  • Pause Animations
Open ICICI 3-in-1 Account

Open ICICI
3-in-1 Account

Manage your Savings, Demat and Trading Account conveniently at one place

+91

BLOG

IT companies continue to struggle with uncertainty

ICICIdirect Research 18 Jul 2025 DISCLAIMER

The earnings performance for IT pack was largely muted, while LTIM stood out with improved execution and margins. Overall, cautious optimism persists in the sector, with deal wins offering medium-term support (albeit ramp up will be key for revenue translation), but near-term growth and margin recovery remain uneven and dependent on improving client sentiment and execution consistency.
 
LTIM: Steady performance with broad based growth and margin expansion

Among peers, LTIM stood out for its stable execution and positive margin delivery. It delivered a steady performance with revenue growth of 0.8% QoQ CC (in line with expectations) and broad-based momentum across most verticals and geographies. EBIT margins expanded by 50 basis points QoQ to 14.3%, supported by operational efficiency programs (Fit4Future). The company’s deal wins came in healthy at US$1.63 billion (3rd quarter of TCV> US$1.5bn).

Despite macro-level caution, the management remains confident on growth momentum as well as margins improvement ahead from a Q1 reference point, although it remained cautious for the full year.


HCLTech: Margins remain under pressure; margin guidance pruned

HCLTech, delivered a muted quarter with revenues down 0.8% QoQ/ up 3.7% YoY), while margins witnessed meaningful pressure. EBIT margins fell sharply due to a mix of higher investments in GenAI and SG&A, one-time client-related issues (bankruptcy) and skill mismatches impacting utilisation. 
Deal wins at US$1.8 billion were the lowest in two years, signalling some softness in client activity.
In terms of guidance, revenue guidance was at 3–5% YoY CC (2–4% organic) from 2–5% earlier, but the downward revision in margin guidance to 17–18% (vs. 18–19% earlier), remains a concern.

Wipro: Mixed bag quarter with deal wins offering medium-term visibility

Wipro reported a mixed quarter. Revenues declined 2% QoQ / 2.3% YoY CC but came in better than street expectations and within guidance (range of -3.5% to -1.5%). While certain segments like Healthcare and Tech showed resilience, verticals like BFSI and Consumer continued to face spending cuts.
The bright spot was the strong deal win momentum, with total TCV at US$5 billion, up 51% YoY. This provides medium term visibility, but ramp-up-related margin pressures may persist in the near term.
Management commentary suggests potential for gradual recovery as the management has guided its IT Services business segment revenue growth of (-)1.0% to +1.0% in CC terms.

Newgen: Weak Q1; Near-term outlook clouded by deal delays

Newgen faced a challenging quarter. Revenues were impacted and grew just 1.9% YoY, due to lower Product/License revenue (~13% YoY decline) and Implementation revenues (~12% YoY decline), and EBITDA margins contracted significantly to 14%, down 110 bps YoY, dragged by operational deleverage and seasonality.
Sluggish deal conversions and smaller average deal sizes cloud the near-term outlook.
Management’s confidence in H2 recovery and long-term AI-led growth remains to be tested against macro and execution risks.

Also explore more on Research page

Download ICICI Direct app

Invest, Track, and Manage your Portfolio Anytime, Anywhere

Get it on google Play Store Download on the App Store
market app

Download ICICI Direct app

Invest, Track, and Manage your Portfolio Anytime, Anywhere

Get it on google Play Store Download on the App Store
market app