Nomura Projects Anaemic Growth for Indian IT Sector in FY27

The Bottom Line

•IT companies face a challenging FY27 as AI integration and macro headwinds dampen growth prospects.
•Watch for quarterly earnings results to confirm if major players can outperform the projected sector slowdown.

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IT Growth Outlook:

Brokerage firm Nomura forecasts anaemic growth for India’s IT sector in FY27, citing persistent macro headwinds and the disruptive impact of artificial intelligence. Major players including Infosys and TCS face near-term challenges that are expected to dampen financial performance throughout the fiscal year. Analysts suggest that the rapid integration of AI is altering traditional service models, leading to a period of readjustment for large-scale IT enterprises.

Industry Challenges:

The sector is navigating a trifecta of pressures: macroeconomic instability, geopolitical uncertainty, and the transformative but volatile influence of AI implementation. While Motilal Oswal reports similar concerns regarding Q1 performance, market sentiment remains cautious about the speed of recovery. JPMorgan projections indicate that a broader recovery for the industry may be delayed until FY30, highlighting the depth of current structural shifts.

Sector Performance:

Despite the broader sector outlook, individual stock performance shows varying investor confidence. Cartrade Tech shares jumped 6% on the NSE on July 1, reaching an intraday high of ₹2,870. Investors continue to differentiate between companies based on their agility in adopting new technological mandates. Market participants are watching how these legacy giants position themselves against the evolving software landscape.

Pulse Intelligence

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Context & Background

Indian IT giants have faced sustained margin pressure throughout 2025 due to global economic slowdowns.
Rapid advancements in AI have compelled IT firms to overhaul their service delivery and talent recruitment models.

Key Consequences

IT firms will likely shift focus toward aggressive AI-reskilling to maintain long-term competitive advantages.
Investors may favor companies demonstrating higher operational efficiency amid the forecasted growth slowdown.

Market & Economic Impact

IT sector stocks are likely to experience volatility as analysts adjust target prices in response to FY27 growth projections.