India’s major information technology firms are expected to report a subdued fourth quarter, as global uncertainty, fears of artificial intelligence disruption, and currency movements shape another challenging earnings season.
Companies such as Tata Consultancy Services, Infosys, HCLTech, Wipro, Tech Mahindra, and LTIMindtree are projected to deliver modest year-on-year revenue and profit growth of around 10%. However, analysts note that much of this expansion is driven by currency effects rather than underlying demand strength. A weaker rupee, which depreciated roughly 4% against the US dollar during the March quarter, has boosted reported earnings for exporters by increasing the value of overseas revenues when converted into rupees.
Stripping out currency gains, performance looks far less impressive. Constant currency growth across leading firms is estimated at just about 2%, reflecting muted demand conditions in core markets. Weak discretionary spending, prolonged deal cycles, and cautious client budgets continue to weigh on the sector’s growth trajectory.
Macroeconomic uncertainty remains a major headwind. Ongoing geopolitical conflicts, particularly war-related disruptions affecting global markets, have added to investor caution. These factors are contributing to delayed decision-making among enterprise clients, especially in sectors sensitive to economic cycles such as retail, healthcare, and high technology.
At the same time, artificial intelligence continues to reshape expectations for the IT services industry. Generative AI tools are increasingly being viewed as capable of automating parts of software development, maintenance, and business process outsourcing. This has intensified concerns that traditional labour-intensive outsourcing models could face structural pressure over time.
Investor sentiment has already reflected these worries. Indian IT stocks have underperformed broader markets, with analysts pointing to fears that AI could reduce future hiring demand and compress billing hours in key service lines.
Despite these challenges, some segments, such as banking and financial services, remain relatively resilient, offering pockets of stability for IT vendors. However, growth in other verticals remains uneven, with companies reporting softness in client spending across multiple geographies.
The weak rupee provides a short-term cushion, but analysts warn it does not signal genuine business expansion. Instead, it masks underlying softness in demand that continues to define the sector’s near-term outlook.
Forward guidance from major IT firms is expected to be conservative, as management teams balance cautious client behaviour with emerging AI-driven transformation opportunities.
Overall, the sector enters the earnings season with subdued expectations, where currency tailwinds temporarily support results but fail to offset broader structural and macroeconomic pressures shaping global technology spending.
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Emmanuel Abara Benson is a business journalist and editor covering artificial intelligence, global markets, and emerging technology.
He has previously worked with Business Insider Africa and Nairametrics, reporting on finance, startups, and innovation.
His work focuses on AI, digital economy, and global tech trends.
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