FY26 may be worse than FY25 for IT services firms amid global headwinds

Uncertainty is also accentuated as the tariff scenario can play out in numerous different ways. A large part of the tariffs could get rescinded in the future or there can be an escalation of tariffs

The rise in tariffs by the United States government could add to the challenges of the IT services industry, according to a report released on Monday.

 

The report highlights that these tariffs could lead to higher inflation and slower economic growth globally with an increased risk of recession in the US and other developed economies.

 

“Uncertainty at the beginning of the (financial) year would lead to deferred decisions and impact growth in the June quarter. This means that FY26E could now end up being worse than FY25 for many of the companies,” said a report by Kotak Institutional Equities.

 

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