From TCS to Coforge: Which IT Stock Is Expected to Deliver the Best Q1 FY27 Performance?

Synopsis: Q1 FY27 results are expected to show mixed performance across IT companies, with Coforge leading revenue growth, while investors closely track margins, deal wins, AI monetisation, and FY27 guidance.

The Q1 FY27 earnings season comes at a crucial time for the Indian IT sector. The Nifty IT index has fallen 13.45 percent since TCS kicked off the results season in April with its Q4 FY26 earnings. Even before that, the sector had corrected sharply, with the index down 31.48 percent from its peak as AI-related concerns and weak global demand hurt sentiment.

The June quarter is expected to remain soft, with weak discretionary spending and AI-led efficiency gains continuing to weigh on revenue growth and margins. While Coforge is expected to lead the sector in revenue growth, Infosys and Tech Mahindra are likely to stand out among Tier-1 companies. Investors will also closely watch FY27 guidance, deal wins, and management commentary.

Q1 FY27 IT Sector Outlook

The June quarter is expected to remain challenging for the IT sector as weak discretionary spending and AI-led efficiency gains continue to weigh on revenue growth and pricing.

Margins Likely to Remain Under Pressure

Profitability is expected to stay under pressure for some IT companies during the quarter. TCS and Wipro are both likely to report around a 3 percent QoQ decline in EBIT, reflecting continued margin challenges. Analysts believe wage hikes, project mix, and pricing pressure could weigh on operating performance.

Guidance and Deal Wins to Drive Market Reaction

Apart from quarterly earnings, management commentary will remain the biggest trigger for IT stocks. Investors will closely track whether Infosys and HCLTech revise their FY27 revenue guidance, while Wipro’s Q2 FY27 outlook will also be in focus. Deal wins, project ramp-ups, AI monetisation, margin trends, and commentary on demand recovery are expected to shape market sentiment.

Top Performer: Coforge Expected to Lead Revenue Growth

Among all the IT companies under coverage, Coforge is expected to report the strongest Q1 FY27 revenue growth, with estimates pointing to a 19.53 percent QoQ increase. The growth is likely to be supported by strong deal execution and project ramp-ups. However, despite the sharp rise in revenue, the company’s net profit is expected to decline 11.1 percent on a sequential basis.

Infosys and Tech Mahindra May Lead Large-Cap Pack

Within the Tier-1 IT companies, Infosys is expected to deliver the highest sequential revenue growth in Q1 FY27. On the profitability front, Tech Mahindra is likely to outperform its peers with the strongest QoQ growth in net profit. The performance of both companies will be closely watched as investors look for signs of improving demand.

Company-wise Expectations (QoQ)

Coforge Ltd

Coforge is expected to report the strongest revenue growth in the IT sector for Q1 FY27. Revenue is estimated to rise 19.53 percent QoQ, while EBIT is likely to grow 12.66 percent, helped by strong execution and recent deal wins.

Even with healthy revenue growth, net profit is expected to decline 11.1 percent QoQ. Investors will keep an eye on the integration of the Encora acquisition and the company’s outlook for its travel business.

Infosys Ltd

Infosys is expected to post the highest revenue growth among Tier-1 IT companies in Q1 FY27. Revenue and EBIT are both estimated to increase by 3.92 percent and 3.91 percent QoQ, respectively.

Net profit is likely to decline 8.55 percent QoQ. The biggest trigger for the stock will be the company’s FY27 revenue guidance and management’s comments on client spending and demand.

Tech Mahindra Ltd

Tech Mahindra is expected to report steady growth during the quarter, with revenue likely to increase 2.30 percent QoQ and EBIT expected to rise 4.02 percent. Net profit is estimated to jump 18.72 percent QoQ, making it the best performer among the large IT companies on the profit front. Investors will also watch for updates on demand and deal execution.

LTM Ltd

Larsen & Toubro Infotech Ltd is expected to report a steady Q1 FY27, with revenue estimated to grow 2.23 percent QoQ. EBIT is also likely to increase 2.00 percent, while net profit is expected to rise 2.8 percent, reflecting stable business performance during the quarter.

However, operating margins are expected to remain under pressure, with the EBIT margin likely to contract by 3.44 percent QoQ. Investors will closely watch management’s commentary on deal wins, demand trends, margin recovery, and AI-led opportunities in the coming quarters.

HCLTech Ltd

HCLTech is expected to report 1.61 percent QoQ growth in revenue, while EBIT and net profit are likely to increase 4.59 percent and 2.31 percent, respectively. The focus will remain on the company’s FY27 growth guidance and management’s outlook for the telecom business, which has been a key area for investors.

Wipro Ltd

Wipro is expected to deliver modest revenue growth of 1.50 percent QoQ in Q1 FY27. However, margins are likely to remain under pressure, with EBIT estimated to decline 3.05 percent. Net profit is also expected to fall 2.24 percent QoQ. Investors will closely watch the company’s Q2 FY27 guidance and its outlook for the BFSI segment.

Tata Consultancy Services Ltd

TCS is expected to report 1.40 percent QoQ revenue growth in the June quarter. Even so, operating margins are likely to remain under pressure, with EBIT expected to decline 3.12 percent.

Net profit is estimated to slip 1.56 percent QoQ. Management’s comments on demand, deal wins, and the pace of recovery in discretionary spending will be closely tracked.

Persistent Systems Ltd

Persistent Systems is expected to continue its steady performance in Q1 FY27. Revenue is estimated to grow 4.17 percent QoQ, while EBIT is likely to increase 5.71 percent. Investors will look for updates on the company’s high-tech deal pipeline, progress on the Nagarro acquisition, and the outlook for future growth.

Mphasis Ltd

Mphasis is expected to report healthy quarterly growth, with revenue likely to rise 4.04 percent QoQ. EBIT and net profit are estimated to increase 4.79 percent and 3.7 percent, respectively. The key focus will be on deal ramp-ups, margin performance, and management’s commentary on demand across its major business segments.

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