Shares of Indian IT firms such as Tata Consultancy Services Ltd (TCS), Infosys Ltd, Wipro Ltd, HCL Technologies Ltd and Tech Mahindra Ltd are in focus on Thursday morning, following peer Cognizant's Q1 results.  

Cognizant, which is listed in the US, posted in-line Q1 results, with its constant currency (CC) revenue growing 3.9 per cent YoY and dollar revenue rising 5.8 per cent YoY to $5,413 million, largely in-line with Street’s estimate of $5,411 million. The Cognizant management maintained its 2026 growth guidance of 4–6.5 per cent CC YoY, which included 150 basis points in inorganic contribution. Cognizant marginally raised its adjusted EBIT margin guidance to 16–16.2 per cent and booked deal wins worth $29.6 billion, up 11 per cent YoY.

"Cognizant is positioning itself as an 'AI builder' to bridge the 'AI velocity gap' between significant AI infrastructure spend and business value realization. Progress on its AI strategy continues to be good," Nomura India said.

Kotak Institutional Equities in an earlier note noted that the dispersion in growth among Tier-1 companies may reduce in FY2027,  except for Wipro. Over the past 10 years, at least 2-3 players have gone through operational execution challenges, it noted.

"TCS was absent from mega-deals, Cognizant was in multi-year recovery, Tech Mahindra was in self-inflicted decline, and Wipro had multi-year challenges of execution. Weak players gifted shares to strong ones," it said.

The domestic brokerage noted that  FY27 guidance bands and consensus growth estimates are now tightly clustered at 1-4 per cent across Tier-1 companies. 

"TCS is back in mega-deals with a US$12 bn TCV. TechM has executed its turnaround and is winning large telecom contracts. Every player now bids for the same deals, in the same markets, at the same productivity benchmarks. The total deal market has not expanded to accommodate them. The share-gain era is over," it said.

Kotak concluded saying what remains is a fight over a services pie that is growing in nominal terms but shrinking in AI-adjusted pricing terms for Indian IT companies.

Choice Broking in a note on Wednesday said it retained its 'Neutral' stance on the domestic IT sector as it believes that the sector is entering a transitionary phase, with near-term deflation and disruption front-loaded, while AI-driven growth and monetisation remain back-ended, supporting a gradual recovery trajectory.

Choice said it sees selective opportunity emerging in quality midcap & small caps where structural growth differentials remain intact and valuation premiums have largely normalised from the peak.