According to brokerage insights, revenue growth is likely to pick up in H2 FY26, aided by strong deal pipelines and ramp-ups in large programs, though macro uncertainties and tight discretionary budgets may temper momentum.
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DRChoksey Report
The Indian IT services sector is expected to witness a steady recovery in Q3 FY26, supported by accelerating AI-driven transformations, cloud modernization, and vendor consolidation, even as global tech spending remains cautious.
According to brokerage insights, revenue growth is likely to pick up in H2 FY26, aided by strong deal pipelines and ramp-ups in large programs, though macro uncertainties and tight discretionary budgets may temper momentum.
Margins are projected to remain resilient, driven by operational efficiencies, utilisation gains, and cost optimisation initiatives. High-growth verticals such as BFSI, healthcare, and technology are expected to lead demand, while retail and communications may see selective softness.
Large-cap IT firms under coverage—TCS, Infosys, and Tech Mahindra—for their strong large-deal pipelines, rising AI-led/digital transformation spending, and improving client activity across key verticals, which together support steady revenue visibility.
All three are executing cost-efficiency and productivity programs that should stabilize or gradually expand margins inspite macro volatility.
Alongside robust balance sheets, high cash generation, and consistent shareholder payouts, the sector setup offers defensive earnings resilience with medium-term growth optionality from Gen-AI and cloud modernisation.
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