PL Capital Has a ‘Buy’ on India’s Top IT Stocks: The Big Takeaways from Q2 IT Earnings

Mumbai | October 28

Indian IT heavyweights delivered a mixed set of earnings in the September 2025 quarter, highlighting a phase of consolidation for the $250-billion technology industry. While Infosys maintained steady growth and strong deal wins, LTIMindtree surprised with margin improvement despite top-client weakness. Wipro, however, continued to lag peers, though deal momentum hinted at early signs of stabilisation.

According to analyst at PL Capital, the September quarter captured an ‘AI transition phase’ for IT firms — one marked by cost-efficiency deals, vendor consolidation, and selective spending rather than discretionary growth projects.

“The divergence across Tier-I IT is now visible — Infosys remains stable, LTIMindtree is delivering operational alpha, and Wipro is still in rebuilding mode,” said Pritesh Thakkar, PL Capital.

The Q2 Scorecard

1 – Revenue Snapshot: Infosys Leads, Wipro Still Cautious

Infosys reported revenue of $5.08 billion, up 2.2% quarter-on-quarter in constant currency (CC) — ahead of expectations. Growth was broad-based across North America (+2.4%) and Europe (+3.4%), with manufacturing and hi-tech verticals leading the charge. The company narrowed its FY26 guidance to 2–3% YoY CC, maintaining operating margins at 20–22%.

“Infosys has navigated a difficult macro with commendable resilience,” said Sujay Chavan of PL Capital. “Its large deal pipeline of $3.1 billion for the second consecutive quarter reinforces confidence in FY27 visibility.”

LTIMindtree, meanwhile, reported 2.4% QoQ CC growth, aided by traction in consumer and healthcare verticals. Despite weakness in its top five accounts (down 5.2%), execution remained strong.

Wipro continued to underperform, clocking 0.3% QoQ CC growth to $2.6 billion, with weakness in the Americas offset by modest growth in Europe and APMEA. As per PL Capital, Wipro’s revenue recovery is ‘gradual but visible,’ supported by a $6.7-billion total deal inflow, including $2.85 billion in large deals.

2 – Margin Scorecard: LTIMindtree Outperforms, Infosys Steady, Wipro Flat

Margin performance became the real differentiator this quarter. LTIMindtree posted an EBIT margin of 15.9%, up 160 bps QoQ, driven by operational efficiencies, a better onsite-offshore mix, and its ‘Fit-for-Future’ cost initiative. “LTIMindtree has shown that even in a muted demand environment, execution excellence can drive earnings resilience,” PL Capital noted in its report.

Infosys sustained its profitability with an EBIT margin of 21%, up 20 bps QoQ, aided by currency gains and Project Maximus efficiencies, which offset higher subcontracting costs. Wipro’s margin, however, was largely flat at 17.2%, with ramp-up costs and bad-debt provisions weighing on profitability.

“Margin leadership is shifting toward players who can sweat cost levers while investing in delivery transformation — LTIMindtree and Infosys clearly stand out here,” said Thakkar.

3 –  The Deal Book: Solid Pipelines, Delayed Conversions

Deal momentum stayed firm across the board, although conversion cycles remain elongated. Infosys’ $3.1-billion TCV included 67% net new wins, highlighting its dominance in vendor consolidation and cost-optimisation projects. LTIMindtree maintained stable order inflows at $1.59 billion, while Wipro’s total contract value rose 31% YoY to $6.7 billion, reflecting healthy pipeline replenishment.

According to PL Capital, large-deal traction indicates that ‘spending has shifted from expansion to optimisation,’ and conversion of these contracts into revenue will define the next growth leg for FY26–27.

4 – The Bottom Line Battle: How Cost Levers and AI Efficiency Shaped Profits

The September quarter showcased divergent paths to profitability. Infosys’ PAT rose 6.5% QoQ to ₹73.8 billion, supported by project efficiencies and strong order execution. LTIMindtree saw its net profit increase 10% QoQ to ₹13.8 billion, outpacing peers. Wipro’s net profit, however, remained under pressure due to one-time provisions, declining modestly 1.2% QoQ.

Across all three, AI-led delivery models and automation remained central to cost structures. Infosys now runs 2,500+ GenAI projects, while LTIMindtree is embedding AI-driven automation into its core delivery stack.

“We are entering a phase where AI productivity savings are real but not yet translating into top-line growth. That inflection could emerge from FY27 onward,” added Chavan.

5 – Operational Pulse: Hiring Normalises, Attrition Eases

Employee metrics pointed to steady normalisation. Infosys added 8,000 employees in Q2, LTIMindtree maintained utilisation above 85%, and Wipro reported attrition at 14.9%, the lowest in eight quarters. “Attrition cooling off below 15% is a structural positive, giving firms room to defend margins even amid weak volume growth,” PL Capital said.

6 –  The Valuation View: Premium for Consistency

At current levels, Infosys trades at ~19x FY27E earnings, LTIMindtree at ~23x, and Wipro at ~16x, implying clear investor preference for companies with consistent execution and margin stability. “While valuations look full, risk-reward favours Infosys and LTIMindtree given their operating leverage, strong deal wins, and visibility into FY27,” noted PL Capital’s report.

The brokerage has retained BUY on Infosys (TP ₹1,780) and LTIMindtree (TP ₹6,530), while maintaining ACCUMULATE on Wipro (TP ₹580), reflecting a selective bullish stance within Tier-I IT.

The Outlook: Recovery in Sight, but Still Uneven

PL Capital expects FY26 to remain a year of transition for Indian IT, driven by AI adoption, large-deal ramp-ups, and margin discipline, rather than a sharp revenue uptick. Infosys and LTIMindtree are expected to grow revenues at a 5–7% CAGR (FY25–28E), while Wipro trails at ~2.5% CAGR.

“Investors should look beyond short-term revenue moderation. The next upcycle will likely be led by AI monetisation, not headcount growth,” concluded Thakkar.

The Bottom Line

Infosys held its leadership on execution and deal momentum, LTIMindtree impressed with margin management, and Wipro showed early stabilisation but remains the slowest to recover. For now, PL Capital’s verdict is clear: the winners in FY26 will be those who balance cost agility with AI readiness — not just scale.

Read the entire Q2FY26 Report for Wipro, LTIMindtree and Infosys here