By Micah Jonah
January 8, 2026
India’s leading information technology firms are expected to post another subdued quarter, as weak demand from the United States and reduced client spending during the holiday season continue to weigh on earnings, according to brokerage estimates released ahead of results.
Analysts expect the country’s top six IT companies by revenue to report average year on year revenue growth of about 4 percent for the December quarter, alongside a roughly 5 percent rise in profit. That would mark a slowdown from the 6.5 percent revenue growth recorded in the September quarter, highlighting the persistence of soft demand conditions.
India’s software exporters last delivered double digit revenue growth in the March quarter of 2023, when digital transformation, cloud adoption and remote work demand surged in the post pandemic period. Since then, growth has steadily moderated.
The broader 283 billion dollar Indian IT industry continues to face macroeconomic headwinds, including uncertainty over potential US tariffs, concerns around proposed visa fee increases, and cautious client spending amid worries about economic growth in the world’s largest economy. The United States remains the single biggest market for Indian IT firms, making demand trends there critical for the sector’s performance.
While global IT bellwether Accenture recently beat Wall Street expectations on artificial intelligence driven demand, its unchanged growth outlook has reinforced expectations of a cautious near term environment for technology spending.
India does not yet have pure play AI companies, but major IT firms are increasingly shaping their AI strategies through acquisitions and partnerships. Brokerages expect momentum in artificial intelligence related demand to build gradually over the next six months, with a clearer pickup likely into 2026.
“Clients remain cautious about committing incremental spending to large programmes amid macroeconomic and tariff uncertainty, as well as the start of a new technology cycle,” said Abhishek Pathak, a research analyst at Motilal Oswal Financial Services.
Uncertainty over U.S. trade policy, visa concerns and weak client spending contributed to record foreign outflows of 8.5 billion dollars from Indian IT stocks in 2025, accounting for nearly half of total foreign exits from Indian equities. The Nifty IT index fell 12.6 percent last year, making it the worst performing sector as Indian markets lagged regional peers.
Tata Consultancy Services, the country’s largest IT firm, is set to kick off the earnings season on January 12. Its revenue is expected to rise about 4.2 percent year on year, slower than the 5.6 percent growth recorded in the same period last year. Infosys and HCLTech are forecast to report revenue growth of around 8.1 percent and 4.6 percent respectively.
Most brokerages do not expect either Infosys or HCLTech to upgrade their full year revenue guidance, reflecting continued caution about near term demand.
Although earnings across Indian equities are expected to improve in the December quarter due to tax cuts, policy easing and stable inflation, the period remains structurally weak for IT firms. Fewer working days during global holidays tend to weigh on billing, while margin pressure from furloughs and wage hikes continues to be a concern at companies TCS and Wipro.
Analysts said some support could emerge by mid 2026 from resilience in the banking, financial services and insurance segment, deal ramp ups, early progress in artificial intelligence strategies and the depreciation of the rupee.
