Major Indian technology companies are bracing for another disappointing quarter as they prepare to release earnings reports beginning April 9th, according to analysis from seven financial firms.
The anticipated revenue and profit increases of approximately 10% compared to last year are primarily attributed to favorable currency exchange rates rather than genuine business growth, analysts report.
Global conflicts, reduced discretionary client spending, and mounting concerns about artificial intelligence’s impact on traditional services continue to pressure company budgets and client investments, making next year’s revenue projections a critical focus for investors.
Companies scheduled to announce fourth-quarter results include Tata Consultancy Services, Infosys, HCLTech, and other major software service providers.
Ambit Capital analysts noted in their preview assessment: “We expect limited deal win surprises, patchy ex-BFSI growth and slow start to (the first half of 2027) on macro/gen AI uncertainty.”
The Indian rupee declined 4% against the dollar during the March quarter, reaching historic lows. This currency weakness typically benefits software companies since they invoice clients in foreign currencies while paying most expenses in rupees, boosting profits when converting dollar earnings.
The technology sector, valued at $315 billion and employing approximately 5.9 million workers, last achieved double-digit revenue growth during the March 2023 quarter. Since that time, market demand has weakened as customers reduced discretionary expenditures, extended decision-making timelines, and redirected investments toward cost-cutting initiatives and AI-focused projects.
Financial analysts predict Infosys and HCLTech will announce annual revenue growth targets of 2%-4% and 4%-6% respectively for fiscal year 2027.
The six largest companies—TCS, Infosys, HCLTech, Wipro, Tech Mahindra, and LTM—are projected to achieve combined revenue growth of 10.9% year-over-year for the March quarter, with net profits increasing 10.3%.
However, when accounting for currency fluctuations, the top four technology firms are expected to show only 1.8% revenue growth for the year, Ambit researchers indicated.
Yes Securities analysts anticipate uneven performance across sectors, with banking and financial services showing relative strength while retail, healthcare, and technology segments may struggle due to greater reliance on discretionary spending.
Jefferies analysts stated in their preview: “Our recent interactions suggest that overall client budgets have not increased materially and discretionary spending remains at bay.”
HSBC analysts suggested that even conservative revenue projections could support stock valuations, noting that current prices reflect expectations of minimal growth.
Motilal Oswal analysts commented on AI concerns: “While the fears around the impact due to AI are difficult to validate or falsify, the burden of proof now sits with IT companies. Re-rating, thus, depends on proof of surviving and thriving.”
Technology company shares have dropped 20% this year as investors worry that advanced AI platforms from companies like Anthropic and Palantir could disrupt established business models and reduce traditional service demand. The broader Nifty 50 index has declined 13%.
