1QFY27 preview: Further estimate downgrades with limited near-term catalysts

Research evidence excerpt

1QFY27 preview: Further estimate downgrades with limited near-term catalysts

Equity Research

26 June 2026 | 3:32PM IST

INDIA IT SERVICES

1QFY27 preview: Further estimate downgrades with limited near-term

catalysts

The demand environment for our India IT Services coverage has remained poor in Manish Adukia, CFA

+91(22)6616-9049 |

recent months, with some pockets seeing a deterioration. As a result, we have manish.adukia@gs.com

Goldman Sachs India SPL

further cut both our Jun ‘26 and FY27 estimates; we now expect 2.4% organic

Raghav Vashishthrevenue growth (aggregate) in FY27 for our coverage (vs 3.2% earlier), and see +91(22)6616-9743 |

downside risk to the top end of both HCL and Infosys guidance (excl. inorganic). raghav.vashishth@gs.comGoldman Sachs India SPL

Additionally, despite continued Fx tailwinds, we expect margins to remain Sumangala Lnu

range-bound, a function of the impact from competitive pressures and +91(22)6616-9045sumangala.lnu@gs.com|

reinvestments. We have revised down estimates for all companies within our Goldman Sachs India SPL

coverage and remain below consensus on FY27 constant fx organic revenue growth

for all; we lower our target prices by 1% to 12%, with the smallest cut for TechM,

and the largest for Infosys, HCL and TCS.

FY27 is tracking to be the fourth consecutive year of low-single digit revenue growth

for India IT, and our analysis suggests this may not be macro related anymore.

Global enterprise revenue growth, which has historically had a high correlation with

IT revenue growth, is showing an uptick, with further divergence in trends vs IT

Services revenue growth. We believe this may suggest a shift of technology spend

away from IT Services or a deflationary impact to revenues due to AI, or a

combination of both.