Indian IT firms are facing their weakest quarterly growth in three years during Q2FY27, with demand conditions largely remaining in a "status quo" state according to the latest CNBC-TV18 poll. The sequential constant-currency revenue growth estimates show TCS at 0.5%, Infosys at 1.4%, Wipro declining 0.9%, HCL Technologies at 2.5%, and Tech Mahindra at 1.5%. On an organic basis, growth is estimated at 0.5% for TCS, 0.9% for Infosys, -1.6% for Wipro, 1.5% for HCL Technologies, and 1.5% for Tech Mahindra. This represents a significant deterioration from previous quarters, with the sector facing sustained headwinds in client spending and project demand.
Mid-tier IT vendors are positioned to continue outpacing their large-cap peers, supported by market-share gains in specific verticals and the ramp-up of large deals. The CNBC-TV18 poll estimates sequential constant-currency growth of 6.7% for Persistent Systems, 3% for Mphasis, and 12.2% for Coforge. Organic growth estimates show 6.7% for Persistent Systems, 2.5% for Mphasis, and 4% for Coforge. Persistent Systems' growth is expected to be supported by the ramp-up of a US$650 million-plus mega-deal, while Coforge is anticipated to see 3.5%-4.5% organic QoQ CC growth supported by broad-based vertical execution. Hexaware is expected to see around 80 basis points contribution from the CPS contract acquisition, and Infosys could get around 50 basis points from Optimum Healthcare.
Three major Indian mid-sized IT services companies are implementing strategic pivots to capitalize on AI automation trends. According to reports from The Economic Times, LTM Ltd launched OneToken in September, offering clients a single AI subscription fee to manage AI spending across various models. Coforge Ltd introduced AI Launchpad in September, enabling clients to build and run their own AI workflows, while Hexaware Technologies Ltd launched a Zero License software offering in August, featuring AI agents that perform work traditionally handled by software products. These companies are addressing AI's threat to traditional IT services by creating new revenue streams, with LTM's OneToken managing a mix of frontier, mainstream, small language, and open-source models through proprietary harnessing capabilities.
Infosys is expected to cut its FY27 revenue growth guidance to 1%-2% or 1.5%-2.5% from the existing 1.5%-3% range, attributed to a ramp-down by a European automotive client and slower volume conversion. HCL Technologies is expected to keep its organic growth outlook broadly unchanged, with its reported revenue growth guidance potentially revised upwards to 3%-4% from 1%-4%, reflecting an estimated 100-basis-point contribution from the Jaspersoft and HPE Telco Solutions acquisitions. On an organic constant-currency basis, the guidance is expected at 2%-3%, with a 2.5% midpoint, broadly unchanged from the earlier 1%-4% organic range.
The contribution from AI-related work remains an important area to watch during the Q2FY27 results season, with Accenture's recent results and guidance having a positive impact on global IT stocks, guiding for 3%-6% growth. Accenture CEO Julie Sweet stated that "We continue to believe the opportunities related to AI are greater than the impact of AI-related efficiencies in our business, and we expect that to continue as AI enables enterprises to do much more." For Indian IT companies, the focus will be on how much of new deal wins and revenue growth is coming from AI-related work, deal competition and its impact on pricing, demand recovery beyond the current status quo environment, and guidance revisions for FY27 outlooks. FY28/FY29 EPS estimates show TCS at ₹159 and ₹165, Infosys at ₹80.4 and ₹84, HCL Technologies at ₹77 and ₹80.9, Wipro at ₹13.5 and ₹13.9, and Tech Mahindra at ₹84.6 and ₹87.7.
