The American depositary receipts (ADRs) of Indian tech companies at the NYSE crashed sharply after the Q1 results of Tata Consultancy Services (TCS) on July 10. Although TCS reported better-than-expected profit and margins, its revenue missed estimates. Both Infosys and Wipro ADRs plunged by more than 4%. Not just that, major ADRs were on a bearish trend.
Infosys ADR:
At the time of writing, Infosys ADR traded at $18.12 apiece, down by 3.7%. Overall, Infosys plummeted by over 4% to hit an intraday low of $18.06 apiece.
Wipro ADR:
Meanwhile, Wipro ADR plunged to hit an intraday low of $2.870 apiece, recording an overall decline of 6.51% on July 10. At the time of writing, the ADR nosedived by 4.07% to trade at $2.945 apiece.
Both Infosys and Wipro are rivals of TCS.
TCS Unsure Of Growth Ahead?
On the bottom line, TCS posted 5.98% YoY and 4.4% QoQ growth to consolidated net profit of Rs 12,760 crore in Q1FY26. The company's operating margins expanded by 30 basis points on a QoQ basis to 24.5%.
However, India's largest tech company, TCS saw a mixed performance in terms of revenue. TCS' consolidated revenue stood at Rs 63,437 crore, down by 1.6% QoQ but up by 1.3% YoY. In constant currency, the revenue declined 3.1% YoY.
According to the TCS management, BSNL ramp down hit TCS revenue by 2.8%, while international market plunged by 0.5%. However, the management sounded unsure of when growth would return.
TCS management stated it is too early to say when growth will come back in revenue. They are optimistic about demand in AI and data.
Wipro, Infosys Q1 Results Expectations:
The ADRs of these two tech behemoths fell despite analysts projecting a better revenue growth compared to TCS.
Wipro will declare its Q1 results on July 17, while Infosys is scheduled on July 23.
For Wipro, analysts at Axis Securities said, "We expect Wipro to report revenue growth of 3% QoQ in rupee terms. Its operating margins are likely to expand on account of cost control measures. Key monitorables would be a) Deal TCV/pipeline, b) European business, and c) Outlook on new large deals."
In case of Infosys, analysts said, "We expect Infosys to report strong revenue growth of 2.6% QoQ, on account of higher working days and growth in the BFSI segment. We also expect operating margins to fall by 120 bps aided by a wage hike for senior staff and acquisition costs for MRE Consulting and Missing Link. Onsite expenses. We also expect the management to increase the company's revenue growth guidance for FY26E to 1%-3% YoY from 0%-3% YoY. Key monitorables would be a) Deal TCVs and pipeline, b) outlook on BFSI vertical, c) margin levers, and d) Gen AI adoption."
For Q1FY26, Wipro earlier lowered its revenue guidance. The Azim Premji-backed company expects revenue from its IT Services business segment to be in the range of $2,505 million to $2,557 million. This translates to sequential guidance of (-)3.5% to (-)1.5% in constant currency terms.
For FY26, Infosys also lowered its guidance. It has projected revenue growth of 0%-3% in constant currency, as against previous guidance of 4.5-5. Infosys expects an operating margin in the range of 20%-22%.
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