India’s top-tier IT companies are expected to post modest Q1 FY26 growth due to subdued demand in key sectors. However, mid-tier firms may outperform, supported by deal momentum in AI, cost optimization, and a cross-currency tailwind of 100–200 basis points.
India’s leading information technology (IT) firms are expected to post muted revenue growth for Q1 FY26, as sluggish demand in the consumer, manufacturing, automotive, logistics, and communication sectors continues to weigh on performance. However, analysts forecast stronger growth for mid-tier IT companies, driven by better deal momentum, faster agility, and a sharper focus on high-growth areas like AI and infrastructure modernization.
According to HDFC Securities, while tier-1 companies are likely to report flat to modest growth in constant currency (cc), mid-tier players are poised to deliver higher revenue growth in Q1 FY26. They also noted that cross-currency tailwinds of 100–200 basis points could help dollar-denominated revenues, partially offsetting weak demand trends.
The earnings season kicks off on July 10, 2025, with Tata Consultancy Services (TCS), followed by HCL Technologies on July 14. Tech Mahindra and L&T Technology Services will announce their results on July 16, while LTIMindtree and Infosys are scheduled for July 17 and July 23, respectively.
ICICI Securities stated that although the 90-day pause in US tariff tensions has offered some relief to economic concerns, it hasn’t yet translated into robust deal closures. Still, cost optimization, AI initiatives, and infrastructure upgrades continue to be major drivers in the ongoing IT deal pipeline.
They added that mid-sized firms like Coforge and Persistent Systems are likely to outperform due to better agility, stronger BFSI vertical exposure, and faster execution of large deals, which are relatively insulated from global macroeconomic frictions.
Motilal Oswal echoed similar sentiments, highlighting that QoQ constant currency growth for large-caps could range from -2.5% to 1.5%, while mid-caps may clock growth between -2.0% and 7.0%. Despite global headwinds, widespread ramp-downs or project deferrals have largely been avoided.
Prabhudas Lilladher noted that tariff uncertainties have lessened, but recovery in affected verticals remains slow, with global clients exercising caution. They expect a subdued Q1 FY26 performance, even though this quarter is typically a strong one for the sector.
As India’s IT industry continues to navigate macroeconomic uncertainties, deal TCV (Total Contract Value) and AI-led initiatives will remain key metrics to watch in the upcoming quarterly results.