# IT Q2 Preview: Muted Growth, Steady Margins

> IT firms report muted Q2 growth as AI deflation pressures margins.
- Title: IT Q2 Preview: Muted Growth, Steady Margins | Shortify
- Summary: IT firms report muted Q2 growth as AI deflation pressures margins. Top Indian IT companies expect 0.5-1% Q2 revenue growth with steady margins amid AI-driven…
- Keywords: it companies, q2 earnings, ai deflation, margins, revenue growth, tata consultancy services, infosys, hcltech, unearthinsight, gartner, fy27, ai revenue
- Source: The Economic Times — https://economictimes.indiatimes.com/markets/stocks/news/it-q2-preview-muted-growth-steady-margins-likely-deal-conversion-ai-deflation-in-focus/articleshow/134672682.cms
- Author: PTI
- Published: 2026-10-04T09:29:00+00:00
- Read time: 1 min
- Topics: it companies, q2 earnings, ai deflation, margins, revenue growth, tata consultancy services, infosys, hcltech, unearthinsight, gartner, fy27, ai revenue
## Q2 growth outlook
India's top IT companies likely report muted revenue growth and steady margins for July-September quarter.

> Q2 is not going to be any better than Q1... because we are not seeing any revival in client budgets or spending
## Q2 growth forecast
UnearthInsight expects top-five it firms to grow 0.5-1 per cent quarter-on-quarter in fy27 q2.
## Client spending trends
Discretionary spending remains stuck amid geopolitical tensions with long decision cycles.
## Gartner's view
Gartner sees q2 as somewhat stronger than q1 due to previously awarded contracts moving into revenue.

> somewhat stronger
## AI deflation impact
AI is deflating traditional services with ai-led revenue under 5 per cent of industry total.
## Earnings timeline
Tata Consultancy Services reports on october 8, HCLTech on october 12, Infosys on october 23.
## Margin pressures
Wage hikes and ai investments are pressuring margins with ai efficiency gains passed to clients.
## Margin outlook
Top firms expect slight margin recovery by fy28 with 6 per cent growth.
## AI revenue growth
Infosys reported 8.2 per cent ai revenue in june quarter, tcs reported usd 2.6 billion ai revenue.
## Key takeaway

Top Indian IT companies expect 0.5-1% Q2 revenue growth with steady margins amid AI-driven cost pressures.