Archive · 4 Oct 2025
Indian IT Sector Expected to Recover in FY27
The Indian IT sector is predicted to see improved growth in the next fiscal year, FY27.
Demand is still soft, facing uncertainty and impacts from artificial intelligence.
Large IT companies are expected to grow slowly, while some mid-tier companies may see a decline.
However, analysts believe the sector will recover.
They also suggest that it is important to actively manage investments in IT stocks because of the cyclical nature of the market.
Indian IT sector sustainable growth is likely within 4-5% in FY27.
Q2 FY26 growth is expected to mirror Q1 due to vendor consolidation.
Macroeconomic uncertainty and AI deflation are key challenges.
Large-cap IT firms expected to achieve 0–2 per cent sequential growth.
Mid-tier IT companies may see a decline of 1% to growth of 5.5%.
- Who
- Indian IT Sector
- What
- Growth Outlook
- When
- FY27 (Recovery Expected)
- Where
- India
- Why
- To Analyze Sector Performance
- Sector Growth (FY27)
- 4-5%
- Current Drivers
- Vendor consolidation, cost rationalization
- Large-cap Growth (Q2)
- 0-2% (USD)
- Mid-tier Growth (Q2)
- -1% to 5.5%
- Main Issues
- Macroeconomic uncertainty, AI deflation
- Buy Rating
- Many IT Stocks
Sources
Coforge, Infosys, Firstsource are Nomura's top IT picks amid mixed Q2 outlook
Multibagger IT stock faces headwinds in short term, trend reversal likely?
India earnings downgrades to continue; US-India tensions a key overhang: Nomura
Infosys, HCL unlikely to revise upper end of FY26 guidance, says HSBC as it picks IT stocks
TCS Q2FY26 preview: Layoffs, employee bench policy & deal wins in spotlight ahead of October 9 results - Industry News
HSBC cuts IT majors’ targets ahead of Q2 results, says no longer 5 year buy and hold plays
IT sector Q2 earnings preview: H-1B fee hike, tariff the big concerns
IT Sector Q2 Results 2025 Preview: Trump tariffs, weak macro to weigh on earnings; midcap IT firms to outperform
