The Indian IT sector is poised for modest growth in FY26, with many firms expecting subdued revenue due to continuing global macroeconomic uncertainties and cautious client spending. Despite robust deal pipelines, discretionary IT spending remains muted, pressuring overall financial performance.
Key Highlights
Top-tier IT companies are forecasted to report flat to low single-digit sequential growth (0-2%) in constant-currency terms, reflecting restrained demand.
Mid-tier firms may outperform larger players with growth ranging from 2-6%, supported by cost-saving contracts and AI-led digital projects.
Regulatory challenges, such as increased H1-B visa fees and potential outsourcing taxes, add to operational complexities.
Clients across sectors are deferring large projects, prioritizing cost optimization amid uncertain inflation and geopolitical risks.
Artificial intelligence adoption is a key growth driver anticipated to ramp up in FY27, offering long-term optimism despite current subdued conditions.
Outlook
While FY26 growth remains muted, recovery is expected in FY27 led by AI integration and improved macroeconomic stability globally.
Source: Systematix Research, Economic Times, Business Standard, The Hindu Business Line