The last quarter of the financial year 2024-25 is expected to be soft due to low discretionary expenses and large uncertainty. Their concerns with improvement in FY 2026 may remain intact in the financial year 2026 amidst increasing tariff war and increasing risks of inflation.
Analysts believe that companies may benefit from better customer demand in the financial services sector in the fourth quarter of FY 2025 (January-March). But after the results of the second quarter of the Accenture, the recent comment has increased the concern of growth for FY 2026. Many believe that there has been an increased extensive economic uncertainty globally, as customers are still unable to estimate the impact of the fees on the US economy.
Accenture said last week that there has been an increase in financial services and disrespect spending in the US. This can be a good sign for TCS, Infosys and Wipro as banking, financial services and insurance (BFSI) business contributes 25-40 percent to revenue every year.
Most IT service companies are largely dependent on the US for their large revenue and their growth has slowed down in the last two years, as customers have reduced the expenditure in digital changes related programs and they were keen in more investment in such technical projects that reduced their cost and improved efficiency.
According to IT industry organization NASSCOM, the growth rate in FY 2025 and FY 2024 was around 4.3 percent and 2 percent. According to a report by Iqra, the increase in FY 2026 is expected to be melodious in the US $ 4-6 percent limit.
McWery analyst Ravi Menon said in a report, “Although it is necessary to keep an eye on whether there will be a recession in the US or not, but we believe that it will only cause temporary damage, as the recession usually leads to cost cuts and there is an increase in demand for outsourcing.”
McWery estimates that if the speed of growth is correct and the comprehensive economic conditions did not deteriorate, then the growth rate of largecap companies will be 6-9 percent in the next financial year. The results of the second quarter of the indexation have strengthened this approach, in which the company has increased its estimate limit to a stable currency to 5-7 percent for the whole year, which was 4-7 percent a quarter a quarter.
The performance of the top six IT service companies in the recent past has been very different from the performance of the industry. In the third quarter of FY 2025, largecap companies registered an increase of 0 – 3.8 percent in stable currency (CC). Midcap again overtaken the big competitors with a 0.2 – 8.4 percent cc quarterly increase under the leadership of Koforge.
The main question is how serious the economic challenges will be during the next 6 months because customers have taken a tough stand on their IT budget. Any deteriorating situation will adversely affect the increase as projects will stop and customers will emphasize their priorities. This will also have immediate effect on the appointment plans of companies.
First Published – March 23, 2025 | 9:45 pm IST