Earnings recovery for TCS and HCL might gain additional momentum from rising AI demand.

Earnings guidance from Indian IT outsourcing firms such as Tata Consultancy Services Ltd. (TCS) and HCL Technologies Ltd. will shed light on the anticipated recovery. As US and European companies continue to be cautious about investing in new projects, TCS and HCL have focused on outsourcing projects that offer cost savings. Consensus estimates suggest that TCS's results next week will show sequential revenue growth for the April-June quarter.

Accenture Plc, a US-listed peer, has noted that the rise of generative artificial intelligence is prompting businesses to reconsider and invest in their IT systems, potentially creating revenue opportunities for firms like TCS and HCL.

In Japan, Fast Retailing Co., the owner of Uniqlo, and Ryohin Keikaku Co., which owns the Muji brand, are both expected to report double-digit operating profit growth for the quarter. Warmer weather has boosted sales of spring-summer clothing, according to Bloomberg Intelligence.

Monday: LG Energy Solution’s (373220 KS) second-quarter earnings might disappoint due to lower demand for electric vehicles in Europe, according to HI Investment & Securities. Demand from Tesla, a customer for its cylindrical batteries, also fell short because of price competition from Chinese EV makers. The company is working to commercialize battery technology to compete with Chinese rivals.

Thursday: Tata Consultancy Services’ (TCS IN) quarterly profit is expected to grow by 8.3% as the earnings recovery begins in the Indian IT sector. Salary hikes are expected to impact margins compared to the previous quarter, although the rate of wage increases has slowed, according to analysts at Prabhudas Lilladher. TCS likely added over 10,000 employees compared to the previous quarter, marking the first sequential headcount growth in a year. Commentary on financial sector clients, which make up nearly a third of revenue and have been significantly affected by the recent slowdown, will be closely watched.

Fast Retailing’s (9983 JP) third-quarter operating income likely rose by 12%, according to estimates. Sales in East and Southeast Asia could improve if economic sentiment strengthens, according to SMBC Nikko. The company's operating margin in China will be closely watched amid weak consumer sentiment. The retailer is also investing in new technologies, including bar code-free checkouts, to achieve its goal of 10 trillion yen ($62 billion) in annual sales.

Seven & i’s (3382 JP) first-quarter operating profit is expected to have declined by 7.7%, according to consensus estimates. Domestic and overseas sales were sluggish in March and April. However, the overseas business may reach its fiscal 2025 operating profit growth target of 4%, supported by improved gas volumes from 204 new stores and slight growth in gross margin, according to SMBC Nikko.