AI Pressure, Client Caution Cloud Indian IT Earnings

India’s leading IT companies are expected to report another subdued quarter as AI-driven pricing pressure and cautious client spending weigh on growth. Brokerages expect revenue growth for the country’s top six IT firms to range between 0.7% and 3.5% quarter-on-quarter in the July-September period, potentially marking the sector’s weakest sequential performance in three years.

The impact of artificial intelligence is forcing IT companies to rethink traditional business models built around billable hours, while clients are demanding more services at lower costs. Although acquisitions and new deal ramp-ups could support some companies, analysts expect organic revenue growth to remain weak. Infosys may also reduce the upper end of its FY27 revenue growth guidance, with brokerages differing on the extent of the potential cut.

Investors are likely to closely watch annual revenue guidance and management commentary as earnings season begins with TCS on October 8, followed by Infosys, HCLTech and Wipro later in the month. HCLTech and Tech Mahindra are expected by brokerages to perform relatively strongly among larger firms, while Wipro could see weaker growth. The Nifty IT index has fallen about 27% so far in 2026, compared with a 13.4% decline in the Nifty 50.

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