Information Technology – Q4FY26 Result Preview – Muted Q4, FY27 outlook in focus
Published on 01 Apr 2026
4QFY26 is expected to be soft and slightly discouraging in an otherwise progressive quarter, after Q3 seasonality and furloughs overhang. Beyond the continued macro softness in few pockets, the cloud of Geo-political conflicts is affecting enterprise spending decisions for few names within our coverage universe. The Middle East tension is directly or indirectly impacting industries around Travel, Transport, Logistics, Energy, O&G and few adjacent areas. The smaller short-burst deals see execution deferrals and delayed closures, leading to elongated sales cycle and slower revenue conversion. We expect median revenue growth of 1.0% QoQ in CC terms & 1.2% QoQ in USD. The currency tailwind is limited (-10 to 70 bps QoQ) in Q4, major currencies like EUR and GBP have strengthened against USD by 1.5% and 0.7% QoQ, respectively, while INR depreciated by 2.4% QoQ against USD. On margins, we expect pressure across in Tier I companies with margin movement in the band of 40 to -150 bps QoQ, while Tier II companies will witness movement in the band of 330 to -30 bps. In Tier I companies TECHM will continue its margin improvement trajectory while HCLT will witness sharp decline due to software business seasonality. Among Tier II companies all companies in our coverage except PSYS, MPHL and LTTS will report margin improvement in Q4.
