Analysts forecast 2.8% constant-currency revenue growth for India’s top IT firms, down from seasonal norms due to AI adoption and spending cuts.
India’s $315 billion IT sector is set to report lackluster April-June earnings, with analysts projecting just 2.8% constant-currency revenue growth. Weak client spending, AI-driven pricing pressures, and geopolitical uncertainty are weighing on performance, despite a typically strong quarter for the industry.
The top six IT firms, including Tata Consultancy Services and Infosys, are expected to post 14% year-on-year revenue growth in rupee terms, but this is largely attributed to rupee depreciation. Net profit growth is estimated at 12%-13%, though underlying demand remains sluggish. Brokerages like Citi and JPMorgan anticipate subdued growth persisting for the foreseeable future.
Companies are adapting to AI-driven demand shifts, with hiring slowdowns already underway. TCS Chairman N Chandrasekaran recently indicated further adjustments may be imminent as clients prioritize cost-cutting and faster software development cycles.