Whalesbook
India's Q4 FY26 earnings season is kicking off, with major companies like Infosys, HCL Technologies, Axis Bank, and Reliance Industries reporting. Investors will be looking past headline numbers to understand how these firms are performing operationally and what their outlook is.
For IT giants Infosys and HCL Technologies, the focus is on adapting to AI, maintaining profitability, and navigating potential global demand shifts. Banks such as Axis Bank are under scrutiny regarding loan growth, asset quality, and profit margins. Conglomerate Reliance Industries will also report, with markets watching its diverse business segments, including new energy ventures.
Infosys, whose stock has fallen 25% in 2025 and trades near 52-week lows, faces cautious optimism. Analysts are watching if its FY27 guidance can exceed 6% growth in constant currency, which could prompt a stock re-rating. Past results show earnings beats can lift shares by up to 10%, while weak guidance causes dips.
HCL Technologies, currently priced at about 17 times its projected FY27 earnings, saw its shares rise 6.8% after its Q4 FY25 results. The market will focus on its IT Services segment guidance for FY27, expected between 3% and 5%. HCL Tech's operating margin was 18.3% in FY25, helped partly by a weaker rupee. Compared to Infosys (trading at around 20 times FY27 earnings), HCL Tech appears cheaper. However, both companies, like the broader IT sector, face potential demand slowdowns and geopolitical uncertainties. Infosys has guided for 0-3% revenue growth in constant currency for FY26, signaling a cautious approach.
Axis Bank reported a slight dip in net profit for Q4 FY25 but saw its bad loans (Gross Non-Performing Assets) fall to 1.28%. Despite this improved asset quality and a projected total income growth of 6-8% year-on-year, the bank's stock dropped over 4% after earnings. Investors are focused on its Net Interest Margins (NIMs), which are expected to remain stable but potentially face pressure.
Overall, India's banking system remains robust, with capital adequacy ratios above 17% and loan growth at 13.8% year-on-year as of mid-March 2026. However, the gap between credit and deposit growth is widening, contributing to margin pressures across the sector.
Reliance Industries posted a 6% year-on-year profit increase to ₹22,434 crore on revenues up 10% to ₹2,64,573 crore for Q4 FY25. The company also announced a dividend of ₹5.5 per share. Attention is on its new energy initiatives and the performance of its digital and retail businesses.
Other companies are also facing challenges. Tech Mahindra recently missed revenue targets due to weakness in its communication and hi-tech divisions, with its stock falling 5% post-results and down 17% year-to-date in 2025. Concerns also include foreign investor outflows and geopolitical events that can impact IT stocks.
Looking ahead, IT firms' FY27 guidance will be crucial, with JM Financial expecting 2-4% for Infosys. Banks anticipate steady credit growth but potential margin softness. Reliance's future growth hinges on its new energy projects. Companies must demonstrate strong execution and clear guidance to navigate the current economic climate.