The quarter prints a measured profit rise. Net profit is about ₹12,075 crore, roughly 1 percent higher year-on-year, with revenue growth that remains slow but positive. Alongside the print, the board cleared an interim dividend of ₹11 per share, keeping the payout cadence intact. The combination signals confidence in cash generation even as large clients stay cautious on discretionary spends.
Under the hood, the useful questions are about mix and efficiency. The demand picture remains two-speed. Cost takeout and run-the-business programs continue while discretionary new build is selective. Generative-AI pilots are scaling into paid programs but the revenue contribution is still small relative to total. What matters near term is large-deal conversion to revenue, pyramid and onsite-offshore tweaks, and utilisation discipline without eroding bench for conversion.
Margins will likely be a game of basis points until decision cycles loosen. Travel costs have normalised, wage cycles are being staggered, and subcontracting has room to inch lower as supply tightness eases. If pricing stays rational on transformation programs, FY26 exit margins can lift versus Q1, but the glide path depends on how quickly furloughs unwind into the holiday quarter.
For investors, the setup is classic. A resilient franchise with industry-leading return ratios, a clean balance sheet and high conversion of profit to free cash. The trade into results season often revolves around relative expectations rather than absolutes. If peers talk up a stronger discretionary pipeline, rotation can be noisy. If macros remain choppy and currency helps, the defensive bid returns to the top tier of IT services.
What to track into the next quarter. Large-deal TCV translating into revenue without heavy transition costs, attrition stabilisation with freshers stepping into billable roles, and commentary on discretionary budgets for calendar 2026. Also watch vertical comments in BFSI and retail, which drive the shape of recovery.
Portfolio take. Stay disciplined on adds. If you are overweight IT, balance with exposure to names more levered to a discretionary rebound. If you are underweight, stagger entries and let the next two quarters settle the margin debate.
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