As India’s IT sector braces for the Q2FY26 earnings season, all eyes are on Tata Consultancy Services (TCS), which will kick off the results cycle on Thursday, October 9. The outcome of TCS’s performance is expected to set the tone for the entire technology segment, with peers such as Infosys, HCL Technologies, and Tech Mahindra following in the subsequent week. Amid muted macroeconomic conditions and sluggish client spending in key international markets, investors are keen to know whether the upcoming results can trigger a much-needed revival across the Nifty IT index.
After a prolonged phase of underperformance, Indian equity markets have shown tentative signs of recovery. The Nifty recently pushed back above its 50-day simple moving average (SMA), with nearly half of Nifty 500 stocks trading above their 10-day SMA — the highest proportion in over two weeks. The volatility index (VIX) remains subdued at 10, reflecting investor calm, while foreign institutional investors (FIIs) are gradually rebuilding their index futures long positions after a sharp unwinding during September’s expiry. Analysts, however, caution that the current upswing must overcome several resistance levels before confirming a sustainable rally.
In this backdrop, the IT sector’s performance is viewed as a crucial catalyst for broader market sentiment. With TCS, Infosys, HCL Technologies, and Tech Mahindra scheduled to report results between October 9 and 16, the coming fortnight could shape short-term investor confidence and determine whether the recent rebound has legs.
Mixed Performance in FY26 So Far
So far this fiscal, the IT sector has lagged behind the broader market. TCS shares are down over 16 percent year-to-date, while Infosys and HCL Technologies have lost around 5 percent and 10 percent, respectively. In contrast, the Nifty 50 index has gained nearly 7 percent during the same period. The Nifty IT index itself has declined by 5.9 percent, reflecting the sustained pressure on technology counters.
The weakness stems from several macro factors — the ongoing uncertainty around U.S. trade policy, renewed talk of “Trump tariffs,” and tighter H-1B visa regulations. These developments have led global clients to adopt a cautious stance on new projects, focusing instead on cost optimization, vendor consolidation, and smaller discretionary spending programs. According to Axis Direct, this quarter’s IT results will likely show moderate sequential growth, driven by steady deal pipelines but constrained by weak demand and prolonged decision-making cycles among clients.
TCS: The Sector Bellwether
TCS, the largest Indian IT services firm, remains the market’s primary barometer. The stock currently trades at ₹2,965, hovering just below a critical resistance level at ₹3,049. Technical charts suggest that a breakout above ₹3,160 could propel the share towards ₹3,270, implying an upside potential of about 10 percent. On the downside, immediate support lies at ₹2,890, with stronger cushioning expected around ₹2,750. A breach below ₹2,655 could, however, trigger deeper corrections toward the 100-month moving average.
Market watchers say a solid earnings performance and positive management commentary from TCS could ignite a broader rally in the sector. However, expectations remain measured — analysts foresee muted sequential growth, with India business likely flat and margins only marginally higher due to seasonal uptick in project completions.
Infosys: Stability with Select Upside
Infosys, set to announce results on October 16, trades around ₹1,467. Technical projections suggest an upside target of ₹1,635 if the stock can clear resistance at ₹1,523 and subsequently at the 200-day moving average near ₹1,616. Downside support is seen at ₹1,414 and ₹1,390, with a stronger floor near ₹1,350. Analysts remain optimistic about Infosys’s resilience, citing its diversified client portfolio and continued traction in cost-efficiency deals.
Brokerages such as Centrum Broking and Axis Direct both list Infosys among their top large-cap picks for Q2FY26, expecting modest growth supported by steady demand in banking, financial services, and technology verticals. However, discretionary segments such as retail and manufacturing may continue to drag.
HCL Technologies: Cautious Optimism
HCL Technologies, whose results are due on October 13, trades around ₹1,420 and offers a balanced risk-reward profile. Resistance lies at ₹1,436 and ₹1,470, while support levels range between ₹1,345 and ₹1,295. Analysts from Motilal Oswal believe HCL Tech remains well positioned thanks to its “all-weather” portfolio that blends infrastructure management, product engineering, and software services.
That said, the stock’s recent breakdown following Q1 results has kept it below its trendline hurdle. A clear breakout above ₹1,470 could open the path to ₹1,565, while failure to hold ₹1,345 could push it toward its 200-week moving average around ₹1,295. Despite near-term headwinds, most brokerages retain a positive long-term stance on HCL Tech for its diversified revenue streams and operational discipline.
Tech Mahindra and Mid-Caps: Opportunity in Volatility
Tech Mahindra, priced near ₹1,435, continues to consolidate around its 100-week moving average at ₹1,421. The near-term ceiling stands at ₹1,484, with potential to extend toward ₹1,615 if buying momentum builds post-earnings. Motilal Oswal sees early signs of transformation under the company’s new leadership, particularly in the BFSI and communications verticals.
In the mid-cap space, Coforge, LTIMindtree, Persistent Systems, and Hexaware are emerging as analyst favorites. These firms have displayed stronger operational execution, helping them outperform Tier 1 peers despite similar macro challenges. Axis Direct forecasts quarter-on-quarter revenue growth of 0 to 3 percent in USD terms for large-caps, but up to 6 percent for select mid-caps, underscoring their relative strength.
Muted Yet Selective Growth Ahead
Consensus across brokerages points to a subdued quarter for the IT industry, characterized by flat to modest growth in both revenue and profit. Centrum Broking and Axis Direct maintain a cautious stance, citing macroeconomic headwinds such as tariffs, tighter visa norms, and the proposed U.S. HIRE bill. However, they highlight pockets of resilience — particularly Infosys, HCL Tech, and Coforge — as well as long-term opportunities in AI integration, cloud migration, and digital engineering.
Market participants are therefore adopting a bottom-up approach, favoring stocks with steady execution, diversified client exposure, and manageable downside risk. For now, investors are watching whether TCS can deliver results strong enough to lift sentiment across the sector — or whether the rally will fizzle under the weight of global uncertainties.
