Top Indian information technology companies are set to report another weak quarter, according to seven brokerage firms, seeing revenue and profit grow by nearly 10% year-on-year, mainly due to the weak rupee rather than underlying growth.
He said uncertainties due to wars, weak discretionary spending and concerns over AI will continue to put pressure on customers’ budgets, making revenue forecasts for the next financial year the main focus for investors.
Tata Consultancy Services Ltd, Infosys Ltd, HCL Technologies Ltd and other software services exporters are scheduled to report results for the fourth quarter starting April 9, 2026.
“We expect limited deal win surprises on macro/general AI uncertainty, poor ex-BFSI growth and a slow start (1H2027),” analysts at Ambit Capital said in a preview note.
The Indian rupee fell 4% against the US dollar during the March quarter and hit a record low. Software services companies generally benefit because they bill in foreign currency while most of the costs are in rupees, profits increase when dollar revenues are converted.
The $315 billion sector, which employs about 5.9 million people, last reported double-digit revenue growth in the March 2023 quarter. Since then, demand has softened as clients have cut discretionary spending, deal cycles have lengthened, and spending has shifted toward cost optimization and AI-based projects.
Brokerage firms said Infosys and HCLTech could provide annual revenue guidance of 2%-4% and 4%-6%, respectively, for FY27.
Revenue of the top six companies – TCS, Infosys, HCLTech, Wipro, Tech Mahindra and LTM – is expected to grow by about 10.9% year-on-year in the March quarter, while net profit will grow by 10.3%.
On a constant currency basis, or removing exchange rate effects, revenues of the top four IT companies are likely to grow only 1.8% for the year, Ambit said.
Analysts at Yes Securities said performance is likely to be uneven with relative resilience in banking and financial services, while retail, healthcare and high-tech sectors may face pressure due to greater exposure to discretionary spending.
“Our recent conversations suggest overall client budgets have not increased materially and discretionary spending remains low,” Jefferies analysts said in a preview note.
However, HSBC analysts said even modest revenue forecasts could support stock prices, given that valuations currently reflect only low-single-digit growth.
Analysts at Motilal Oswal said while fears over the impact of AI are “difficult to confirm or disprove, the burden of proof now lies on IT companies. Thus, re-rating depends on proof of survival and thriving.”
Shares of IT services companies have fallen 20% so far this year as investors worry that advanced AI tools launched by Anthropic PBC and Palantir could disrupt IT’s traditional business models and destroy businesses. Nifty 50 is down 13%.
