India’s leading IT services companies, including Tata Consultancy Services, Infosys and HCLTech, are expected to report subdued fourth-quarter results, with growth driven more by currency effects than underlying demand.
Brokerage estimates suggest revenue and profit will rise roughly 10% year-on-year. However, much of that increase is attributed to the depreciation of the Indian rupee, which boosts earnings when dollar-denominated revenues are converted into local currency.
On a constant currency basis—excluding exchange rate effects—growth remains weak, with top firms expected to post only modest gains. Analysts highlight ongoing macroeconomic uncertainty, geopolitical tensions and cautious client spending as key factors limiting expansion.
Discretionary IT spending continues to lag, particularly in sectors such as retail, healthcare and technology, while banking and financial services remain relatively stable. Longer deal cycles and a shift toward cost optimisation projects are also constraining revenue momentum.
The sector is also facing structural concerns related to artificial intelligence. New capabilities from firms like Anthropic and Palantir are raising questions about whether traditional IT outsourcing models could be disrupted.
Forecasts for the next fiscal year remain conservative. Infosys is expected to guide for 2%–4% growth, while HCLTech may project 4%–6%, reflecting continued caution among enterprise clients.
The broader $315 billion Indian IT sector, employing nearly 6 million people, has struggled to regain the double-digit growth rates last seen in 2023. Stock performance reflects these concerns, with IT shares significantly underperforming the wider market this year.
Analysts note that valuations now imply low growth expectations, meaning even modest improvements in outlook could support share prices. However, a sustained re-rating will depend on whether companies can demonstrate resilience and adaptation in an AI-driven environment.