The Q4FY25 earnings of TCS, Infosys, and Wipro, three of India's biggest IT players, have revealed mixed results amid ongoing global uncertainties. Despite some growth, the key financial indicators from these companies show signs of slowdown, sparking concerns about the near future of the Indian IT sector.

TCS Q4FY25 Results

Tata Consultancy Services (TCS) reported its slowest revenue growth in four years. The company posted revenues of ₹64,479 crore, a modest increase from ₹61,237 crore in the same period last year. Despite this, its profit after tax (PAT) declined by 1.7% to ₹12,224 crore, compared to ₹12,434 crore for the same quarter last fiscal year. This decline reflects the broader economic uncertainty and demand slowdown, impacting even the largest IT companies.

Infosys Q4FY25 Performance

Infosys also faced challenges, with an 11.75% YoY decline in net profit, dropping to ₹7,033 crore for Q4FY25. However, its revenue from operations saw a rise of 8% YoY to ₹40,925 crore, up from ₹37,923 crore last year. Despite the revenue growth, Infosys' revenue guidance for FY26 was weak, with expectations of flat to 3% growth in constant currency terms, marking its weakest forecast since April 2009.

Wipro Q4FY25 Report

Wipro, on the other hand, saw a 26% YoY increase in net profit to ₹3,569.6 crore. However, consolidated revenue from operations remained almost flat at ₹22,504.20 crore. Wipro's outlook for the next quarter, Q1FY26, indicated a potential 1.5% to 3.5% decline in IT services revenue, further signaling caution in the market.

IT Sector Q4FY25 Earnings Analysis

The results from TCS, Infosys, and Wipro highlight the persistent challenges the IT sector is facing, including demand uncertainty, the ongoing global economic slowdown, and concerns over US trade policies. Elevated interest rates, sticky inflation, and the looming risk of a US recession further add to the pressure on the sector.

Additionally, the US tariff policies, particularly under President Trump, have heightened concerns about the global economic environment, with many experts forecasting a recession in the US. This could significantly impact global economic growth and, in turn, the Indian IT sector, which is heavily dependent on the US market for revenues.

Impact of AI and Automation

Another key factor that is reshaping the IT industry is the rise of artificial intelligence (AI) and automation. While these technologies present opportunities, they also bring challenges as IT companies must adapt to new skill sets, technologies, and business models.

Outlook for FY26

Looking ahead, the outlook for FY26 remains uncertain. The mixed performance of these IT giants in Q4FY25, coupled with weak guidance, suggests that the sector is likely to face more turbulence. Experts predict that the upcoming year could be slightly better than FY25 but still challenging due to global headwinds and domestic pressures.

The Indian IT sector is at an inflection point, where companies must adjust to global macroeconomic conditions, AI disruption, and demand fluctuations. The cautious tone from management across the big players, combined with ongoing external risks, suggests that FY26 may bring more volatility before recovery.

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