- IDBI Capital expects muted Q3 FY26 growth due to seasonal furloughs and macro conditions
- Client spending remains cautious, limiting sequential growth in Indian IT services sector
- Mid-tier IT firms likely to outperform tier-1 due to agility and cost-optimisation exposure
Despite near-term softness, IDBI Capital maintains a positive medium- to long-term outlook for the sector, citing enterprise-wide scaling of AI initiatives and robust deal pipelines.
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IDBI Captial Report
IDBI Capital expects the Indian IT-services sector to report a muted performance in Q3 FY26, impacted by seasonal furloughs and an unchanged macro environment. Client decision-making remains cautious, particularly for discretionary spending, resulting in subdued sequential growth across most tech companies.
While tier-1 players are likely to see limited upside, mid-tier firms are expected to outperform due to better agility and stronger exposure to cost-optimisation deals. Deal execution continues to provide support, with AI-led transformation and infrastructure modernization emerging as key drivers of medium-term growth.
Margins are projected to remain stable, aided by currency movements and operational efficiencies, offsetting wage hikes and seasonal pressures.
Despite near-term softness, IDBI Capital maintains a positive medium- to long-term outlook for the sector, citing enterprise-wide scaling of AI initiatives and robust deal pipelines.
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