Analysts expect year-on-year revenue growth of around 6% and profit growth near 5.5% for the September quarter, continuing eight straight quarters of single-digit performance in the IT industry, according to a Reuters report.
Reuters says Tata Consultancy Services (TCS) is forecasting a subdued increase of about 2%, a notable slowdown from the 8% growth posted last year. Infosys and HCLTech are seen faring somewhat better with projected growth rates of approximately 8% and 9.5% respectively.
Weak discretionary spending by US clients, macro uncertainty, escalating US tariff risks and policy changes like the proposed $100,000 H-1b visa fee are contributing to client hesitation and deal delays.
Margin expansion is expected to be limited, with many firms relying on currency tailwinds and cost control to offset rising wage pressures.
After foreign investors pulled out over ₹678 billion from IT stocks in 2025, the Nifty IT index is down about 20% YTD, as per latest market trends.
This steep correction has improved valuations, leading some analysts to see a better risk-reward ratio despite the soft demand outlook.
Banks and financial services verticals may remain relatively stable, while sectors like manufacturing and retail could feel the pinch in this cycle.
As Q2 earnings season looms, all eyes will be on how IT majors navigate through muted demand, tariff pressures, and the evolving delivery models that may shape the next leg of growth.
Tags: Indian IT sector, TCS, financial services, banking services, IT sector, weak growth, tariffs, client demand, margins
