Indian IT Services 1QFY27 preview: No respite in business or narrative

Research evidence excerpt

Indian IT Services 1QFY27 preview: No respite in business or narrative

1 July 2026

Equities

IT Services Indian IT Services

1QFY27 preview: No respite in business or narrative India

◆ 1QFY27 is unlikely to benefit from the usual seasonal strength,

keeping investor sentiment low for the sector YogeshHead of Aggarwal*Research, India

HSBC Securities and Capital Markets (India) Private Limited

◆ Companies may blame the Middle East war for 1Q’s drop, but yogeshaggarwal@hsbc.co.in

+91 22 2268 1246

we do not think the Street will see this weakness as transitory Prateek Maheshwari*, CFA

Analyst, India IT Services

◆ Near-term deflation impact from AI is likely to keep the growth HSBC Securities and Capital Markets (India) Private Limited

prateek.maheshwari@hsbc.co.in

rates and valuations suppressed; revise TPs by -20% to +12% +9198 1937 0718

Sagar Desai*

1QFY27 is unlikely to provide any cheer to the beaten down sector: Growth is likely HSBC Securities and Capital Markets (India) Private Limited

to remain muted in a usually seasonally strong quarter. While many companies may sagar.desai@hsbc.co.in

attribute the 1Q drop to the Middle East conflict (as has been the case with Accenture as +91 83 6919 9927

well), investors are unlikely to view the weakness as transitory, unless 2Q growth

commentary is significantly positive. * Employed by a non-US affiliate of HSBC Securities (USA) Inc, and is not registered/ qualified pursuant to FINRA regulations

Similar to Accenture, it is possible that HCLT and INFY may prune down the top-end of

their respective guidance, though we think the lower end and even mid-range of

guidance is still achievable (INFY FY27 revenue growth guidance is 1.5%-3.5%, and for

HCLT it is 1%-3%). Even in the mid-tier, we do not expect much growth surprise in 1Q