The IT Q2 FY27 preview points to another muted quarter: research firm UnearthInsight expects India’s top five IT services companies to post just 0.5-1% quarter-on-quarter growth for July-September, with little improvement over April-June, according to a Business Standard report published on October 4, 2026.
Gartner describes demand conditions as somewhat stronger than in the previous quarter, but both analysts say margins remain under pressure. TCS reports first on October 8, followed by HCLTech on October 12 and Infosys on October 23.
What Is the IT Q2 FY27 Preview Telling Investors About Growth?
The headline message is modest growth rather than a recovery. UnearthInsight’s 0.5-1% sequential range for the top five companies is close to the pace of the previous quarter. Full-year growth for the sector is estimated at 3-4%, and the report notes that a good part of that comes from acquisitions rather than organic demand.
Geography matters too. The report identifies the United States as the weakest market, while Asia-Pacific shows stronger momentum. Discretionary spending remains constrained amid geopolitical tensions, which keeps clients cautious about new project starts.
Why Is AI Deflation a Concern for Indian IT Margins?
Gartner expects margins to stay broadly stable with limited room for expansion. UnearthInsight adds that efficiency gains from AI are also being passed back to clients, meaning vendors do the same work for less money. This is the dynamic often called AI deflation, and it is a focus area in this results season.
AI-led revenue is still a small slice of the pie: under 5% of the industry total, according to the report. Infosys disclosed that AI contributed 8.2% of its revenue in the first quarter, while TCS reported annualised AI revenue of $2.6 billion.
Industry Reaction and Expert Commentary
Gartner’s warning is the most striking in the report. It says generative and agentic AI will materially reduce demand for labour-based services, potentially affecting around 50% of managed-services opportunities by 2030. That puts pressure on the traditional headcount-driven model that has powered Indian IT for decades.
The source report did not include market reaction or comments from the companies themselves, and Industrial Front has not found any trade-body response at the time of writing.
What Happens Next for IT Services Companies?
The first real data points arrive with TCS on October 8, HCLTech on October 12 and Infosys on October 23. Investors will watch for deal wins, commentary on AI-related pricing, margin guidance and any change to full-year outlooks.
Frequently Asked Questions
How much growth is expected from top Indian IT companies in Q2 FY27?
UnearthInsight projects 0.5-1% quarter-on-quarter growth for the top five IT companies, with little improvement over the April-June quarter.
When will TCS, HCLTech and Infosys announce Q2 results?
TCS is scheduled to report on October 8, HCLTech on October 12 and Infosys on October 23, as per the Business Standard preview.
What share of IT revenue comes from AI?
AI-led revenue is under 5% of the industry total. Infosys reported 8.2% AI revenue in Q1, and TCS reported $2.6 billion in annualised AI revenue.
Source: Business Standard, October 4, 2026.
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