Demand stabilizing

Large deal activity remains strong

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The IT sector witnessed a return to positive sequential growth in Q2 FY 2026, driven by Tier-1 companies reversing declines seen over the past two quarters. Tier-2 companies continued to outperform, both in growth and margins.

Net sales of 214 software service providers increased 8.3% to Rs 2,49,816 crore in Q2FY 2026 over Q2 FY 2025. The operating profit margin (OPM) declined 67 basis points (bps) to 20.69%, leading to a 4.9% increase in operating profit (OP) to Rs 51,684 crore. Higher OP resulted in profit before tax (PBT) inclining 3.7% to Rs 47,771 crore. Other income (OI) was higher by 2.1% to Rs 5,006 crore.

Net sales of 214 software service providers increased 4.6% to Rs 2,49,816 crore in Q2FY 2025 over Q1FY 2025. The OPM declined 23 bps to 20.69%, leading to a 3.4% increase in OP to Rs 51,684 crore. Despite higher OP, lower OI led to PBT decreasing 0.3% to Rs 47,771 crore. OI was lower by 23.9% to Rs 5,006 crore. Interest cost and depreciation were higher by 4.2% and 3.0%, respectively, when compared with Q1 FY 2026.