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Indian IT Giants Face Market Slowdown Amid Global Uncertainty and Weak Forecasts

IT Services

Business Honor
23 April, 2025

Top firms see falling growth; focus shifts to AI and cost-efficiency strategies.

India's top IT companies—Tata Consultancy Services (TCS), Infosys, HCL Technologies, and Wipro—are experiencing a sharp decline, with their aggregate market capitalization falling to a one-year low of 5.8% in early trading from an 8% rally in January.

HCL Technologies, which reported a 6.1% year-on-year revenue growth to ₹30,246 crore in the three months ended January, narrowly fell short of analyst estimates. The IT Company forecasts a 2% to 5% revenue growth for fiscal 2026, beating the average analyst estimate of 0% to 2%. This was driven by potential in generative AI and clients looking for cost savings through difficult trade conditions.

By contrast, Infosys has predicted a flat to 3% rise in revenue for fiscal 2026, short of analyst estimates of 2% to 4%. The company logged a 7.9% year-on-year rise in revenue to ₹40,925 crore for the latest quarter, falling short of the estimated ₹42,073 crore. Net profit fell 11.8% to ₹7,033 crore. Infosys attributes this to economic uncertainty in the world and U.S. trade policies affecting major markets.

Wipro's stock dipped as much as 6.3% after estimating a 1.5% to 3.5% sequential fall in revenue in the June quarter, reflecting continued pressure on worldwide technology spending. Analysts say this disappointing forecast means a third straight year of revenue fall, possibly undercutting the company's turnaround attempt.

The larger Indian IT industry is also facing issues, such as U.S. tariffs under President Trump, which have created uncertainties in major markets, particularly in manufacturing and retail. The Nifty IT index itself has fallen over 27% from its record high, signaling the concerns of investors regarding the sector's possibility of growth.

Against such headwinds, the industry is turning towards such future-forward technologies as generative AI in order to generate growth and remain competitive in an ever-evolving environment.