Pressure Mounts on Infosys and Wipro as High Hopes Clash with India’s Market Woes

Infosys, Wipro, and HCL Technologies are facing tough challenges with high expectations, as investors worry about a possible market correction in India.

For the 2025 financial year, Indian IT companies were expected to bounce back after a slow year due to reduced spending by US clients. While the April-June earnings showed some improvement, meeting the high hopes for the full year might be difficult.

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HSBC Global Research analysts noted that while demand is improving, it’s not enough to beat current estimates. Sectors like banking, media, and telecommunications are showing signs of recovery, but they may not be enough to meet market expectations. The focus is now on how US companies’ budgets for 2025 and interest rate cuts will affect the market.

This is happening while concerns about an Indian market correction grow. After the strong run of the Nifty 50, analysts are questioning whether earnings can support the high valuations, especially after Tata Consultancy Services (TCS) missed its profit expectations.

Elsewhere in Asia, Taiwan Semiconductor Manufacturing Co. (TSMC) reported a 39% rise in revenue, calming fears about how long AI-related growth will last. Contemporary Amperex Technology Co. (CATL) likely pushed through competition in the battery market to post strong profit growth.

Key highlights to watch:

Saturday: Avenue Supermarts (DMart) likely saw double-digit profit growth in Q2, though a slower increase in store openings might affect future profits. Revenue rose by 14%, lower than Citi’s 19% estimate, and the firm is cautious about earnings due to potential gross margin issues.

Monday: HCL Technologies is expected to keep its full-year revenue growth forecast of 3-5%. However, growth might slow down due to cautious IT spending from media, telecom, and tech clients.

Reliance Industries: Jio’s price hikes likely boosted its digital services revenue, though the petrochemicals business probably saw lower profits. Refining margins likely halved, according to Emkay Research analysts.

Thursday: Infosys is expected to raise its full-year revenue forecast, while Wipro’s report may not have major surprises. Analysts expect both companies’ margins to improve, helped by cost-cutting measures.

TSMC: The chipmaker is expected to manage challenges like weaker iPhone demand, with analysts watching for updates on Nvidia’s Blackwell chip delays and their impact on TSMC’s revenue.

Friday: CATL is expected to show strong quarterly growth despite falling battery prices. The company’s cost advantages helped stabilize margins, while its energy-storage business is creating new growth.