India leading information technology companies are expected to report another subdued quarter, as weak demand in the United States and client shutdowns during the holiday season continue to affect technology spending. According to estimates from nine brokerage firms, the top six IT companies by revenue are likely to record an average year on year revenue growth of about 4 percent and a profit rise of 5 percent for the December quarter. This is lower than the 6.5 percent revenue growth seen in the September quarter.
Indian software exporters last posted double digit growth in the March quarter of 2023, when demand for digital transformation, cloud services, and remote work tools surged after the pandemic.
The broader 283 billion dollar Indian IT industry is still facing macroeconomic challenges. These include uncertainty over United States tariffs, concerns related to a proposed 100000 dollar visa fee, and cautious client spending due to growth worries in the world largest economy. Since Indian IT firms earn a large share of their revenue from the United States, the slowdown there has a direct impact on the sector.
Global sector leader Accenture recently exceeded market expectations on the back of AI led demand. However, its unchanged outlook points to a cautious near term environment.
Although India does not yet have pure play AI firms, many IT companies are shaping their AI strategies through acquisitions and partnerships. Brokerages believe AI driven demand could build over the next six months and improve further in 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.
In 2025, foreign investors pulled out a record 8.5 billion dollars from IT stocks, nearly half of the total foreign exits from Indian equities. The Nifty IT index fell 12.6 percent, making it the worst performing sector.
Tata Consultancy Services will start the earnings season on January 12. Its revenue is expected to rise 4.2 percent year on year, slower than last year growth of 5.6 percent. Infosys and HCLTech are forecast to post revenue growth of about 8.1 percent and 4.6 percent, respectively.
Brokerages do not expect major upgrades to growth forecasts for fiscal 2026. While fewer working days and wage hikes may pressure margins, strength in the BFSI segment, deal ramp ups, early AI initiatives, and rupee depreciation could offer support by mid 2026.
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