Top Indian information technology firms are set to report another lacklustre quarter,
with revenue and profit seen rising around 10% year-on-year
largely on a weaker rupee rather than underlying growth, seven
brokerages said.
Uncertainties due to wars, weak discretionary spending and
concerns around artificial intelligence will keep weighing on
client budgets, making the revenue forecast for the next fiscal
year a key focus for investors, they added.
Tata Consultancy Services, Infosys,
HCLTech and other software services exporters are due
to report fourth quarter results starting April 9.
“We expect limited deal win surprises, patchy ex-BFSI growth
and slow start to (the first half of 2027) on macro/gen AI
uncertainty,” Ambit Capital analysts said in a preview note.
The Indian rupee fell 4% against the U.S. dollar during the
March quarter, and slid to record low levels.
Software services companies typically benefit as they bill
in foreign currencies while incurring most costs in rupees,
inflating profits when dollar revenues are converted.
The $315 billion sector, employing about 5.9 million people,
last reported double-digit revenue growth in the March 2023
quarter. Since then, demand has softened as clients cut
discretionary spending, deal cycles lengthened, and spending
shifted towards cost optimisation and AI-led projects.
Infosys and HCLTech are likely to provide annual revenue
forecasts of a rise between 2%-4% and 4%-6% respectively for the
fiscal year 2027, the brokerages said.
Revenue for the top six firms — TCS, Infosys, HCLTech,
Wipro, Tech Mahindra, and LTM —
is expected to grow about 10.9% year-on-year in the March
quarter, with net profit rising 10.3%.
On a constant currency basis, or stripping out exchange-rate
effects, the top four IT firms are more likely to see revenue
rise only 1.8% for the year, Ambit said.
Analysts at Yes Securities said performance was likely to
be uneven, with relative resilience in banking and financial
services, while retail, healthcare, and hi-tech segments could
face pressure due to higher exposure to discretionary spending.
“Our recent interactions suggest that overall client budgets
have not increased materially and discretionary spending remains
at bay,” analysts at Jefferies said in a preview note.
However, even a modest revenue forecast could support stock
prices, HSBC analysts said, noting valuations currently reflect
only low-single-digit growth.
While the fears around the impact due to AI are “difficult
to validate or falsify, the burden of proof now sits with IT
companies. Re-rating, thus, depends on proof of surviving and
thriving,” said analysts at Motilal Oswal.
Shares of IT companies are down 20% so far this year,
on investor worries that advanced AI tools launched by Anthropic
and Palantir could disrupt IT’s traditional business models and
cannibalise business. The Nifty 50 is down 13%.
Published on April 6, 2026
