Indian IT Firms Set for Mixed Q2 Performance Amid Macroeconomic Headwinds
Analysts anticipate a mixed performance in the current quarter for Indian IT companies, with select enterprises expected to deliver robust results despite macroeconomic headwinds. The IT services sector is projected to report moderate growth in Q2FY26, driven by steady deal pipelines but constrained by weak demand and uncertainty.
Large enterprises are focusing on cost optimization, leading to increased cost take-out deals and reduced headcount costs. Despite these challenges, Tech Mahindra and HCL Technologies have demonstrated resilience to discretionary spending trends and macroeconomic uncertainties. Clients of Indian IT companies are allocating fewer funds to large initiatives due to economic uncertainty in the US and Europe, with Trump tariffs and H-1B visa restrictions adding to the macroeconomic challenges. However, analysts have highlighted Infosys, HCL Tech, Coforge, and Persistent Systems as top picks for the current quarter. The rally follows a period of sustained selling pressure that had pushed many stocks to multi-month lows, with mid-cap IT firms expected to outperform their large-cap counterparts. Indian tech stocks rebounded on Monday, with key players gaining between 2% and 3%, pushing the Nifty IT index up 2.28%.
While macroeconomic challenges persist, Indian IT companies are expected to report moderate growth in Q2FY26, driven by steady deal pipelines. Analysts have identified select companies as top picks for the current quarter, with mid-cap firms anticipated to outperform large-cap firms. Despite the rebound in Indian tech stocks, the sector continues to face headwinds from macroeconomic uncertainties and geopolitical challenges.
