Indian IT services companies are expected to report a sluggish start to FY27 as macroeconomic uncertainty, weaker discretionary spending, delays in major deal decisions and growing AI-related pressures weigh on revenue growth during the June quarter, according to analysts.
Tata Consultancy Services (TCS) will announce its Q1 results on July 9, followed by HCLTech on July 13, Wipro on July 16 and Infosys on July 23.
Brokerages expect most tier-one companies to report sustained negative sequential earnings growth in constant currency terms. HDFC Securities expects first-quarter growth for tier-1 firms to be between -1.3% and 1.1%, while Kotak Institutional Equities estimates growth between -1% and 1% for larger IT companies.
Analysts said the demand environment remains weak as customers continue to delay spending decisions. They also noted increased competition, AI-led pricing pressure, and a shift in technology spending toward frontier AI and AI infrastructure companies.
ICICI Securities expects TCS to post 0.3% constant currency revenue growth. The brokerage said delays in converting total contract value into revenue have impacted growth across sectors due to weak macro conditions linked to the ongoing war in West Asia. It expects the banking, financial services and insurance business to support growth through the execution of two major deals secured earlier.
TCS announced nine major deals during the quarter, including one with Swedish industrial engineering company SKF for an AI-led business transformation. ICICI Securities expects quarterly bookings of $9 billion to $11 billion. It also expects EBIT margin to decline by 150 basis points due to year-over-year wage growth, AI investments and higher sales and marketing expenses, partially offset by currency movements.
