Revenue & EBIT misses estimates while PAT beats expectations. Revenue for Q4FY25 came at INR 409.2Bn up 7.9% YoY but down 2.0% QoQ (vs Consensus est. at INR 421.1Bn). EBIT for Q4FY25 came at INR 85.7Bn, up 12.5% YoY but down 3.8% QoQ (vs Consensus est. at INR 86.9Bn). EBIT margin was up 86bps YoY but down 39bps QoQ to 21.0% (vs Consensus est. at 20.6%). PAT for Q4FY25 came at INR 70.3Bn, down 11.7% YoY but up 3.3% QoQ (vs Consensus est. at INR 66.9Bn). Weak guidance for annual revenue growth: Infosys expects FY26 revenue to grow by just 0–3%, slightly lower than the 1–3% forecast for FY25. This cautious view comes amid global economic uncertainty, rising tariffs, and higher debt, which are impacting client budgets. While deal ramp-ups are on track, early signs of spending pressure are emerging. Clients are now focusing more on cost-cutting, vendor consolidation, and efficiency. Sectors like Manufacturing, Consumer, and Communications may be hit by tariff changes. In FY25, strong performance came from Financial Services, Energy & Utilities, and Manufacturing. Financial Services saw stable or slightly increased budgets focused on AI, compliance, & cost control. Manufacturing grew strongly but may face CY25 headwinds, particularly in Europe due to weakness in Automotive. Energy & Utilities maintained steady deal flow. Communications and Hi-Tech struggled with reduced demand from budget cuts. EBIT margin guidance intact at 20-22%: Infosys reported a FY25 EBIT margin of 21.1%, up 50 bps from FY24. However, Q4FY25 margin dipped slightly to 21% due to wage hikes and acquisitions. For FY26, Infosys expects margins between 20–22%, already factoring in wage hikes. Attrition stayed high at 14.1% in Q4FY25. The company hired 15,000 freshers in FY25 and plans to hire over 20,000 in FY26. We expect FY26 margins at 20.7%, supported by cost-saving efforts and benefits from Project Maximus in the second half of the year. View and Valuation: Weak revenue guidance for FY26 reflects subdued performance expectations for the fiscal year. However, as the macroeconomic headwinds ease off – rising client interest in AI-led transformations & cost-saving initiatives may drive future deal opportunities and business momentum. We expect Revenue/ EBIT/ PAT to grow at a CAGR of 4.4%/ 4.7%/ 5.5% over FY25-27E and revise our rating to ‘ADD’ with a downward revised target price of INR 1,580 implying a PE of 22x (maintained) on FY27E EPS of INR71.8.

TCS misses Q4FY25 estimates by narrow margins. Revenue for Q4FY25 came at INR 644.8Bn up 5.3% YoY and 0.8% QoQ (vs Consensus est. at INR 648.4Bn). EBIT for Q4FY25 came at INR 156.0Bn, down 2.0% YoY and 0.4% QoQ (vs Consensus est. at INR 161.4Bn). EBIT margin was down 180bps YoY and 28bps QoQ to 24.2% (vs Consensus est. at 24.8%). PAT for Q4FY25 came at INR 122.2Bn, down 1.7% YoY and 1.3% QoQ (vs Consensus est. at INR 127.4Bn). TCS secures USD 12.2Bn in Q4FY25, may face revenue conversion challenges: TCS reported a strong Q4FY25 TCV of $12.2Bn, its second-highest ever, without any mega deals. Growth was led by North America ($6.8Bn), BFSI ($4Bn), and Consumer ($1.7Bn). TCS expects FY26 to be better than FY25, but economic uncertainties may delay deal conversions into revenue. Sectors like Insurance, Retail, Healthcare, and Auto remain cautious. The $39.4Bn FY25 TCV pipeline is strong, with AI and GenAI driving growth. However, economic headwinds could impact near-term revenue realization. EBITM target unchanged at 26% to 28%; Wage hike decisions expected later in FY26: TCS' EBIT margin declined to 24.2% in Q4FY25 and 24.3% for FY25 due to wage hikes, promotions, and infrastructure investments. While the long-term target is 26-28%, economic uncertainty and lack of currency benefits may pose challenges. However, efficiency gains and the BSNL contract's completion should aid FY26 margins. Attrition stood at 13.3%, but management isn't concerned. TCS added 625 employees in Q4, reaching a total of 607,979, with plans to hire in digital and AI, while wage hikes will be decided later in FY26. View & Valuation: TCS has surpassed a topline of INR 30Bn and continues to report industry-leading margins. Despite this, there are mixed signals surrounding the company’s future performance. While FY26 performance is expected to be better than FY25, ongoing macroeconomic challenges may introduce delays in client decision-making and discretionary spending, which could impact topline growth. Considering these factors, we expect Revenue/ EBIT/ PAT to grow at a CAGR of 7.2%/ 10.7%/ 10.8%, respectively, over FY25-FY27E and maintain our rating to ‘BUY’ with a downward revised target price of INR3,950, which implies a PE multiple of 24x (maintained) based on the FY27E EPS of 164.6.

Assessing Q3 Results amid Current Macroeconomic Challenges INMART reported Q3 Revenues as expected, EBITDA exceeded estimates, PAT in-line. Revenue for Q3FY25 came at INR 3.5Bn up 16.0% YoY and 1.9% QoQ (vs Consensus est. at INR 3.5Bn). EBITDA for Q3FY25 came at INR 1.4Bn, up 61.3% YoY and 2.7% QoQ (vs Consensus est. at INR 1.2Bn). EBITDA margin was up 1090bps YoY and 30bps QoQ to 39.0% (vs Consensus est. at 34.2%). PAT for Q3FY25 stood at INR 1.2Bn, up 47.7% YoY but down 10.4% QoQ (vs Consensus est. at INR 1.3Bn). Revenue growth led by ARPU, Focus shifting to High value subscribers: INMART’s revenue per paying supplier rose 14% YoY to ₹63,000, driven by top-tier Gold & Platinum customers, who now contribute 50% of revenue with low churn. The company is focusing more on retaining high-value subscribers rather than aggressive new customer acquisition, aiming for steady and sustainable growth. Weak churn in silver category remains concern for growth: INMART's paying subscriber base grew 1% YoY to 214,000 but declined by 3,715 in Q3FY25 due to a focus on high-quality businesses and fewer working days during the festive season. Churn, especially in the Silver category, remains a challenge, but the company is enhancing user experience and engagement to address it. Double-digit growth challenges & caution on 10% Collection benchmark amid negative subscriber additions: INMART's customer collections grew 10% YoY to INR 3.63Bn in Q3FY25, driven by better supplier payments. However, growth remains below past highs, and sustaining double-digit growth may be tough due to subscriber losses. The company is focused on reducing churn and reviving customer acquisition for future growth. Q3 EBITDA Margins at 39%, Normalization Expected with Subscriber Growth: INMART reported strong Q3FY25 EBITDA growth, with consolidated EBITDA at INR 1.3Bn (39% margin, up 61% YoY) and standalone EBITDA at INR 1.4Bn (43% margin, up 65% YoY). Cost savings and better operating leverage drove this growth. However, as the company refocuses on subscriber growth, margins are expected to normalize over time. View and Valuation: INMART's revenue growth has moderated, mainly due to lower churn rates among Gold & Platinum subscribers. The company advised against using a 10% collection growth benchmark, citing slower customer acquisition and churn issues. EBITDA margins are expected to normalize in upcoming quarters, and reduced sales and marketing investments may impact subscriber acquisition rates. Considering these factors, we expect Revenue/ EBITDA/ PAT to grow at a CAGR of 9.8%/ 7.5%/ 8.3% respectively over FY25E-FY27E and downgrade our rating to HOLD with a revised target price of INR2,286 implying a PE of 24x (earlier 35x) on FY27E EPS of INR95.2