India’s leading information technology companies are expected to deliver another muted set of earnings as weak demand from the United States and seasonal client shutdowns continue to limit technology spending. Ahead of results, brokerages expect the top six IT firms by revenue to post average revenue growth of about 4% year on year and profit growth of around 5% in the December quarter. This marks a slowdown from the 6.5% revenue growth seen in the September quarter and highlights the prolonged demand softness faced by the sector.
Indian software exporters last reported double digit revenue growth in the March quarter of 2023 when digital transformation cloud adoption and remote work demand surged in the post pandemic phase. Since then, the $283 billion Indian IT industry has faced persistent macro challenges including uncertainty around US tariffs concerns over proposed $100000 visa fees and cautious client spending due to growth worries in the world’s largest economy. With a significant share of revenues linked to the United States, the sector remains highly sensitive to these developments.
Recent earnings beat by sector bellwether Accenture, driven by AI led demand offered some optimism but its unchanged growth outlook reflects a cautious near-term environment. Although India has no pure play, AI firm’s IT companies are gradually shaping AI strategies through acquisitions and partnerships. Brokerages expect AI related momentum to strengthen over the next six months with demand, likely improving into 2026. “Clients remain cautious about committing incremental spending to large programs amid macro and tariff uncertainty and a new tech cycle,” said Abhishek Pathak research analyst at Motilal Oswal Financial Services.
Uncertainty around US tariffs visa issues and weak spending led to record foreign outflows of $8.5 billion from IT stocks in 2025 nearly 50% of total foreign exits from Indian equities. The Nifty IT index fell 12.6% during the year making it the worst performing sector. Tata Consultancy Services will begin the earnings season on January 12 with revenue expected to rise 4.2% year on year. Infosys and HCLTech are projected to report growth of 8.1% and 4.6% respectively. While margins face pressure from furloughs and wage hikes resilience in BFSI deal ramp ups early AI strategy formation and rupee depreciation could offer support by mid-2026.
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