Indian IT Firms Brace for Weak Q1 as AI and Soft Demand Slow Growth
India’s leading IT companies are expected to report a subdued first quarter as artificial intelligence-driven pricing pressure, cautious client spending, and global geopolitical uncertainties continue to weigh on business. Although the April–June quarter is traditionally a strong period for the sector, analysts believe the anticipated recovery has been pushed further out. Tata Consultancy Services (TCS) will begin the earnings season on July 9, with Infosys, HCLTech, and Wipro reporting later this month.
Brokerages expect the country’s top IT firms to post modest revenue and profit growth in rupee terms, largely supported by the weaker rupee rather than stronger business performance. On a constant-currency basis, revenue growth is projected to remain below 3%, reflecting sluggish demand from key international markets. Analysts also expect Infosys and HCLTech to lower the upper end of their annual revenue guidance.
The rapid adoption of AI is reshaping the industry by accelerating software development and increasing pressure on pricing, prompting companies to slow hiring and rethink their business models. Investor concerns over AI disruption have made the Nifty IT index the worst-performing major sector in India this year, with weak demand across consumer, telecom, and technology segments adding to the industry’s challenges.
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