Indian IT Sector

As India pivots from software services to AI token "factories" with tax breaks for global firms, questions arise over jobs, skills and the future of its $200 billion IT export engine

Industry converges at 34th Nasscom Technology & Leadership Forum 2026 beginning today

Supports IT services industry and students

Nomura said the quarter was "largely in line," noting that revenue growth was marginally ahead of its estimate and that margins were close to expectations.

Persistent Systems share price today: Market participants attributed the decline largely to profit booking after a sharp rally over the past few months rather than any deterioration in fundamentals.

TCS Q3 results impact: The common thread across analysts is that while Q3 execution remains strong and margins resilient, clear visibility on broad-based demand acceleration is still missing.

India's IT companies earn a significant share of their revenue from the United States, making the world's largest economy crucial for the sector

After a modest recovery in Q2 on low expectations, Motilal Oswal expects December quarter (Q3) to revert to typical seasonal softness, with furloughs weighing on growth across large IT services firms.

Analysts believe that valuation comfort coupled anticipated revival in earnings and possible reversal of AI trade offer a better risk-reward scenario for Indian IT firms.

Valuations across the sector remain attractive, but Nomura stays selective. It has rolled forward its valuation framework to H1FY28 while maintaining target multiples.

The services sector's contribution to India's economy more than doubled over the last decade, with IT services GVA growing nearly fourfold despite current industry headwinds

At the Business Standard BFSI Insight Summit 2025, Salesforce CEO Arundhati Bhattacharya said customer service remains a major challenge for banks as they strive to balance convenience with security

South Asia Chief Economist Franziska Ohnsorge flags India's low net FDI flows

Platform-based, intellectual property-driven models trigger cases

The Indian IT sector is experiencing subdued growth, with industry guidance and recent results pointing towards a muted outlook for FY26, though a recovery in FY27 is possible with recovery in key export markets and adoption of new technology. According to HSBC Global Research, near-term discretionary spending among clients remains weak, but there are signs of acceleration in the next fiscal year, especially as adoption of artificial intelligence (AI) among enterprises gathers pace. While the near-term demand environment remains soft and unchanged, FY27 is likely to see pick-up in demand driven by recovery in the US macro and increase in demand from IT companies looking to drive enterprise scale AI adoption, HSBC Global Research said. Key indicators show that the Indian IT sector has faced challenges related to global macroeconomic uncertainty, client cost optimisation, and delayed decision-making. Major Indian IT firms such as TCS, Infosys, and HCLTech reported healthy large deal .

The non-tech sector collective continues to hold the majority contributor status (52 per cent), which it took over from the tech sector in October 2022

Accenture's 2-5 per cent growth guidance despite strong bookings highlights subdued IT demand, hitting Indian IT stocks already under pressure from tariffs and visa fees

New US visa fee piles pressure on Indian IT firms, threatening margins and accelerating shift to GCCs, automation, and local hiring

The decision also shows that Mr Trump is becoming more radical with his time in office, not less

The biggest payoff of India's emerging military-industrial complex may be for its IT- and electronics-related skillsets