Indian IT companies are likely to face headwinds in the financial year 2026 (FY26) due to rising macroeconomic uncertainties, according to a recent report by global financial services firm Nomura. The report forecasts a muted performance for large-cap IT firms in the near term, with a sequential dip in revenues anticipated across the board.
Nomura highlighted that while FY2025 (FY25F) marked a phase of recovery for Indian IT companies—thanks to a modest resurgence in discretionary spending, particularly within the financial services sector—the momentum may slow down in FY26F. This expected deceleration is attributed to growing concerns around global economic conditions, including trade tensions sparked by recent U.S. policy decisions.
“The resurgence seen in FY25F is unlikely to sustain at the same pace into FY26F, with client sentiment turning cautious amid increasing macroeconomic challenges,” the report stated.
Key concerns include uncertainty stemming from recent U.S. tariff policies. On April 2, U.S. President Donald Trump announced a comprehensive imposition of tariffs on several countries. In a move to reinforce his trade policy goals, President Trump emphasized a strategy rooted in “fairness and reciprocity,” pledging to match tariffs imposed on U.S. goods with equivalent duties on imports.
This development is expected to affect global trade dynamics, influencing the investment decisions of key clients of Indian IT firms—especially in the U.S., which remains their largest market.
The first quarter of FY26F is projected to be particularly soft for Indian IT companies, shaped by recent global economic shifts. The subdued start could hinder their ability to achieve robust growth throughout the year.
Nomura also cited Accenture’s latest earnings as a reference point for the sector. While Accenture’s guidance indicates potential for improved revenue growth in FY26F—projecting a 400 basis point year-on-year increase—the firm has also warned that persistent macroeconomic volatility may lead clients to cut back on IT spending.
Reflecting this cautious outlook, Nomura has revised down its revenue growth forecast for large Indian IT services firms in FY26F, lowering projections by 230 to 350 basis points due to increasing risks of a U.S. economic slowdown.
As global uncertainties mount, Indian IT firms may need to recalibrate their strategies and prepare for a more conservative client environment in the upcoming fiscal year.
