Information Technology – Apr-Jun’26 Earnings Preview – FY27 off to a slow start amid uncertain tides
Published on 02 Jul 2026
IT companies are expected to see subdued growth in Q1FY27, in an otherwise seasonally strong quarter. Leakages in traditional services and cannibalization of new revenue streams are weighing on overall revenue growth. Q1 impact is broad-based, with direct effects visible in Consumer, Hi-Tech, and Telecom. Slower decision-making and elongated sales cycle are leading to delays in revenue conversion and execution. AI-led deals contribute disproportionately to the pipeline, and come with smaller deal size and tenure, which translate into lower ACV and fragmented deal closures. We expect median revenue growth of 0.8% QoQ in CC terms and 0.4% QoQ in USD terms, implying a cross-currency headwind of ~40bps. EUR and GBP have weakened by 0.3% and 0.6% QoQ, respectively, against USD, while INR depreciated 3.4% QoQ, with the latter supporting margins in Q1.
