India’s leading IT companies like Wipro, TCS and Infosys are expected to face another challenging year in fiscal 2026 because of weak client spending in the US, as per a Reuters report. Analysts believe that indication from global tech giant Accenture signals ongoing caution in IT budgets and delay in decision making. These reasons can impact near term recovery for the IT sector.
Weak demand recovery
Accenture, which is considered a major indicator for the global IT industry, stated that discretionary spending continues to be limited in its latest quarterly update. It also pointed out ongoing cancellations in new deals and delays particularly in the US. Clients are limiting the budgets amid economic uncertainty and due to trade tensions. According to the Times of India report, Accenture CEO Julie Spellman Sweet has linked part of the slowdown to the Trump administration’s ”Department of Government Efficiency” efforts.
ALSO READAccenture becomes DOGE’s first corporate victim as shares plunge on contract cut warning
Amit Chandra, Deputy Vice President at HDFC Securities told Reuters that, ”the developments of the past few months have only intensified the uncertainty encircling the first half of FY26”. ”It is increasingly not clear whether a recovery will take place at all this fiscal.”
The Indian IT index is down more than 15% this year, on path for its worst quarters since the middle of 2022. Top firms like HCL Tech, TCS, Wipro and Infosys have all faced stock plunge between 11% and 18% since January.
ALSO READIndia’s IT edge: Why Accenture’s concerns may not be all bad news for tech sector
Analysts forecast muted growth
According to the report by Reuters, Citi Research anticipates that IT firms will record 4% revenue growth in FY26, similar to FY25’s soft performance. Morgan Stanley also stated that growth estimates can be affected because of cautious client spending and volatile global outlook.
Analysts at the Kotak Institutional Equities have also warned that weak large-deal flow in FY25 is expected to affect the revenues in FY26.
Early adoption of generative AI tools can also play a role as a short term drag as companies make changes to new delivery models.
Sectors like banking and healthcare have started to recover,
» Read More
