From mint · Harsha Jethmalani · · 1m 10s
IT Firms' Q2 Reality Check: Growth Recovery Still Out of Sight
IT firms face weak Q2 growth as AI pressures and macro uncertainty delay recovery.
In brief
IT firms face weak Q2 growth as AI pressures and macro uncertainty delay recovery. Indian IT stocks show muted Q2FY27 growth with large firms expected to grow 0.5% while tier-II firms lead at 3.5%. Originally reported by mint.
Q2 Earnings Season Begins
Tata Consultancy Services releases Q2FY27 results on 8 October, marking the start of Indian IT sector earnings season.
“Q2 is usually a seasonally strong quarter”
Accenture's Q4FY26 Results
Accenture delivered 7% year-on-year revenue growth in Q4FY26, exceeding guidance and consensus estimates.
“7% year-on-year revenue growth”
Accenture's FY27 Growth Target
Accenture's FY27 revenue growth target of 3-6% is ahead of Street's 2-5% expectations.
“FY27 revenue growth target of 3-6%”
Organic Growth Concerns
Systematix Shares and Stocks (India) notes Accenture's FY27 growth target implies modest 0.5, 4% organic growth, below FY26 organic growth of 3%.
“modest 0.5, 4% organic growth”
Q2FY27 Growth Projections
Jefferies India expects 1.7% aggregate sequential constant currency revenue growth for IT firms in Q2FY27, led by acquisitions.
“1.7% aggregate sequential constant currency revenue growth”
Tier-II Firms Outperform
Mid-sized IT firms are expected to see 3.5% sequential constant currency revenue growth, while large firms grow at 0.5%.
“3.5% sequential constant currency revenue growth”
Q2FY27 Weakness for Large Firms
Q2FY27 is the weakest quarter for large IT firms in the past three years with 0.5% growth.
“0.5% growth”
The essence
Indian IT stocks show muted Q2FY27 growth with large firms expected to grow 0.5% while tier-II firms lead at 3.5%.
