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Indian IT Firms Brace for Weak Quarter Despite Currency Boost

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India’s leading IT services companies, including Tata Consultancy Services, Infosys and HCLTech, are expected to report subdued fourth-quarter results, with growth driven more by currency effects than underlying demand.

Brokerage estimates suggest revenue and profit will rise roughly 10% year-on-year. However, much of that increase is attributed to the depreciation of the Indian rupee, which boosts earnings when dollar-denominated revenues are converted into local currency.

On a constant currency basis—excluding exchange rate effects—growth remains weak, with top firms expected to post only modest gains. Analysts highlight ongoing macroeconomic uncertainty, geopolitical tensions and cautious client spending as key factors limiting expansion.

Discretionary IT spending continues to lag, particularly in sectors such as retail, healthcare and technology, while banking and financial services remain relatively stable. Longer deal cycles and a shift toward cost optimisation projects are also constraining revenue momentum.

The sector is also facing structural concerns related to artificial intelligence. New capabilities from firms like Anthropic and Palantir are raising questions about whether traditional IT outsourcing models could be disrupted.

Forecasts for the next fiscal year remain conservative. Infosys is expected to guide for 2%–4% growth, while HCLTech may project 4%–6%, reflecting continued caution among enterprise clients.

The broader $315 billion Indian IT sector, employing nearly 6 million people, has struggled to regain the double-digit growth rates last seen in 2023. Stock performance reflects these concerns, with IT shares significantly underperforming the wider market this year.

Analysts note that valuations now imply low growth expectations, meaning even modest improvements in outlook could support share prices. However, a sustained re-rating will depend on whether companies can demonstrate resilience and adaptation in an AI-driven environment.

Wipro Shares Rise After $375M Olam IT Acquisition

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Wipro shares gained after the company announced it would acquire the IT services business of Olam Group for an enterprise value of $375 million, marking its largest acquisition to date.

The deal involves the purchase of 200 million shares of Mindsprint, Olam’s IT and digital services arm, through Wipro Networks. Mindsprint provides services across multiple sectors including agribusiness, manufacturing, retail, healthcare and cybersecurity.

Investors responded positively, pushing Wipro’s stock higher in early trading and making it one of the top performers on India’s IT index. Analysts noted that the acquisition strengthens Wipro’s domain expertise, particularly in the food and agribusiness vertical, while also enhancing its consulting and platform capabilities.

A key component of the transaction is a long-term commercial agreement. Olam has awarded Wipro an eight-year services contract with a committed annual spend of $100 million, implying a total contract value exceeding $1 billion. This provides strong revenue visibility and a more stable, recurring income stream.

Market analysts highlighted that the deal goes beyond traditional outsourcing by integrating intellectual property-led platforms and creating a “captive” delivery relationship, which tends to be more strategic and harder to replace.

Despite the positive reaction, Wipro’s shares remain significantly down year-to-date, reflecting broader challenges in the IT services sector, including weak discretionary spending and uncertainty around the impact of artificial intelligence on traditional business models.

The acquisition signals Wipro’s effort to reposition itself toward higher-value, industry-specific services as competition intensifies and growth slows across the global IT outsourcing market.

Bellatrix Aerospace Raises $20M to Scale Satellite Propulsion

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Bellatrix Aerospace has secured $20 million in a pre-Series B funding round, aiming to expand production of its satellite propulsion systems amid rising global demand.

The round was led by Cactus Partners, with participation from several new and existing investors. The Bengaluru-based company plans to use the funds to scale manufacturing capacity and accelerate delivery timelines for both domestic and international clients.

CEO Rohan Ganapathy stated that the investment will enable a significant increase in annual production, particularly as satellite constellations continue to expand worldwide.

Founded in 2015, Bellatrix focuses on advanced propulsion technologies for satellites and has established operations in the United States. The company is positioning itself to benefit from growing demand in the commercial space sector.

The funding comes as India continues to open its space industry to private players beyond Indian Space Research Organisation, alongside government initiatives to support startups through dedicated funding programs.