Will IT companies heal in 2026?

The Nifty IT index has risen 10% over the past two months, driven by rupee depreciation and expectations of a recovery in discretionary technology demand.

- Harsha Jethmalani [e-mail]

Q3FY26 is almost over, and collectively, the first three quarters of FY26 have shown no clear signs of easing in earnings downgrades of Indian IT services providers.

Revenue visibility for Q4 remains bleak amid client caution and global macroeconomic uncertainty. Plus, the latest cue—global tech giant Accenture’s quarter ending November (or Q1FY26) results—is hardly encouraging.

Accenture competes with tier-IIT firms in the managed services (outsourcing) business, so it is seen as an indicator of future performance. Its Q1FY26 constant currency revenue grew 5% year-on-year (yo-y), beating analysts’ estimates.

Growth was led by the financial services sector. Managed services continued to outperform the consulting business. Deal wins saw a decent 10% yo-y growth with bookings at $20.9 billion. Still, it maintained its FY26 growth guidance at 2-5%.