IT sector revenue growth to remain modest in 2026-27, too

AI, GenAI to drive growth in the medium term; GCCs, global uncertainties pose key risks

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The information technology (IT) services sector is expected to continue registering modest mid-single-digit growth next financial year, supported by a gradual recovery expected in core IT spending even as demand conditions remain cautious.

At the same time, rising adoption of artificial intelligence (AI) and generative AI (GenAI) is emerging as a medium-term growth driver, supporting incremental deal wins and transformation-led spending.

Revenue is expected to grow 6-8 per cent in 2025-26, of which 4-6 per cent will be driven by the depreciation of the rupee against major foreign currencies. Core growth is seen muted in low-single digits, reflecting weak demand in key markets such as the US and Europe, which together account for nearly 85 per cent of the sector's revenue.

Geopolitical uncertainties and trade disruptions are likely to impact discretionary spending, constraining growth in constant currency terms.