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FY26 may be worse than FY25 for IT services firms
Business Standard
|April 08, 2025
The hike in tariffs by the United States government could add to the challenges of the IT services industry, according to a report by Kotak Institutional Equities.
The report highlights that these tariffs could lead to higher inflation and slower economic growth globally with an increased risk of recession in the US and other developed economies.
"Uncertainty at the beginning of the (financial) year would lead to deferred decisions and impact growth in the June quarter. This means that FY26E could now end up being worse than FY25 for many of the companies," stated the report.
The report has reduced FY27E revenue growth by 1.2-3.4 per cent and EBIT margins by 10-50 basis points, leading to earnings per share cut of 1.6-5.8 per cent.
The uncertainty is also accentuated as the tariff scenario can play out in different ways.
This story is from the April 08, 2025 edition of Business Standard.
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