Author:Bharath Rajeswaran and Sai Ishwarbharath B
Jan 8 (Reuters) – Indian information technology companies are expected to report another lackluster quarterly results as tepid U.S. demand and customer shutdowns during the holidays continue to weigh on technology spending, nine brokerages said ahead of earnings reports.
Brokerages expect the top six IT companies in terms of revenue to post about 4% year-on-year revenue growth in the December quarter and average profit growth of 5%, reflecting prolonged weak demand, compared with 6.5% revenue growth in the September quarter.
Indian software exporters last reported revenue growth in the March 2023 quarter, when digital transformation, cloud adoption and remote working demand surged in the post-pandemic period.
India’s $283 billion IT industry continues to face macro headwinds, including uncertainty over U.S. tariffs, challenges posed by a proposed $100,000 visa fee and lower customer spending amid concerns about growth in the world’s largest economy.
Indian IT companies derive a large portion of their revenue from the United States, making the world’s largest economy crucial to the industry.
Industry leader Accenture’s recent earnings beat Wall Street expectations for artificial intelligence-led demand, although its unchanged growth outlook underscored a cautious near-term environment.
Although there are no pure-play AI companies in India, IT companies are starting to develop AI strategies through acquisitions and partnerships. The brokerage expects AI momentum to gain momentum over the next six months, with demand picking up in 2026.
Abhishek Pathak, research analyst at Motilal Oswal Financial Services, said: “Customers remain cautious about committing incremental spend on large projects against the backdrop of macro and tariff uncertainties and new technology cycles.”
US tariff uncertainty, visa concerns and weak spending have led to record foreign outflows from IT stocks reaching $8.5 billion in 2025, accounting for almost half of total foreign exits from Indian equities.
The Nifty IT index fell 12.6% in 2025, making it the worst-performing sector as the Indian market lagged its Asian and emerging market peers.
Tata Consultancy Services, the country’s largest IT company, will kick off the earnings season on January 12. Its revenue is expected to grow about 4.2% year over year, down from the 5.6% growth reported last year.
Infosys and HCLTech are expected to see revenue growth of approximately 8.1% and 4.6% year-on-year respectively, compared with 7.6% and 5.1% respectively in the year-ago period.
Most brokerages do not expect HCLTech to raise its revenue forecast for FY2026 by 2%-3%, nor Infosys by 3%-5%.
