<p>Bengaluru: Indian IT giants are likely to report another quarter of subdued growth as customer firms have yet to open discretionary spending in a meaningful manner. Additionally, the main market for the tech firms - United States - continues to grapple with macroeconomic uncertainties, sectoral experts told DH. </p>.<p>The earnings season for the January-March quarter (Q4FY25) and full financial year 2024-25 will kick off with TCS reporting its results on April 10, followed by Wipro on April 16, Infosys on April 17, HCLTech on April 22 and Tech Mahindra on April 24.</p>.<p>“I am expecting that the final quarter will end with modest revenue gains. So, you will not see a major uplift in terms of revenue and definitely the growth will be muted,” said Biswajit Maity, Senior Principal Analyst at research and consulting firm Gartner. </p>.<p>Ratings firm Icra Ltd has predicted the overall industry growth at close to 4-6% in US dollar terms. “I don't foresee any major recovery. The optimism of recovery even later this year seems to have faded out to some extent, if not fully,” said Deepak Jotwani, Vice President and Sector Analyst at Icra.</p>.<p>Analysts have pointed out that Trump-led administration’s measures including policy uncertainty, tariff measures, have led to recession fears in the US, a major obstacle to growth for India’s software firms.</p>.<p><strong>Selective hiring to continue</strong></p>.<p>Indian IT companies had posted negative net addition for six straight quarters until the first quarter of FY25 (April-June 2024), following which hiring had picked up moderately. However, Q3 was disappointing again as some failed to meet their hiring targets while others projected similar hiring numbers for fiscal year 2026.</p>.Dabur sees contraction in Q4 profit, decline in India revenue; shares tumble to 52-week low.<p>For FY25, on an overall net level, there could be selective additions. However, experts do not anticipate hiring activity to pick up. “Top talent hunt is expected to continue. Selective hiring is likely to continue for top categories, especially in high-demand areas like artificial intelligence, where delivery units reward exceptional talent,” said Nabanita Dutta - Head, Media Content and Technical Research, Anand Rathi Wealth. </p>.<p><strong>No recovery in discretionary spends</strong></p>.<p>While companies had pinned their hopes on US President Donald Trump’s supportive policies consequently leading to a pick up in client budgets, the picture has soured now. Tariff imposition has led to fears of inflation and a recession, owing to which clients will be cautious resulting in budget cuts and delays in large transformation deals. </p>.<p>Hence, hopes of a rebound in the discretionary spends which was somewhat picking up, as the management of the IT companies highlighted in the previous quarters, will again take a backseat. IT budgets of clients fluctuate with their profit and experts are unsure about when it will pick up. </p>.<p>Another continued hurdle for the sector is the contracting deal size and widening lag periods, impairing revenue flows. This means that even though clients are signing deals, they are going a little slow in terms of expenditure. “Clients are holding their budget and are not releasing it until and unless they are seeing any specific value for that particular investment,” added Maity. </p>.<p>However, given the companies’ investment in generative artificial intelligence (Gen AI), those deals are likely to provide an upside. Most of these deals are in proof of concept (POC) stage, but will be capitalised this year (FY26) onwards and contribute to their revenue, though not significantly. </p>.<p>All major Indian IT stocks and the Nifty IT index had tumbled around 3-3.5% on Friday over fears of a US recession. Meanwhile, the share price of IT major Tata Consultancy Services (TCS ) hit a 52-week low.</p>
<p>Bengaluru: Indian IT giants are likely to report another quarter of subdued growth as customer firms have yet to open discretionary spending in a meaningful manner. Additionally, the main market for the tech firms - United States - continues to grapple with macroeconomic uncertainties, sectoral experts told DH. </p>.<p>The earnings season for the January-March quarter (Q4FY25) and full financial year 2024-25 will kick off with TCS reporting its results on April 10, followed by Wipro on April 16, Infosys on April 17, HCLTech on April 22 and Tech Mahindra on April 24.</p>.<p>“I am expecting that the final quarter will end with modest revenue gains. So, you will not see a major uplift in terms of revenue and definitely the growth will be muted,” said Biswajit Maity, Senior Principal Analyst at research and consulting firm Gartner. </p>.<p>Ratings firm Icra Ltd has predicted the overall industry growth at close to 4-6% in US dollar terms. “I don't foresee any major recovery. The optimism of recovery even later this year seems to have faded out to some extent, if not fully,” said Deepak Jotwani, Vice President and Sector Analyst at Icra.</p>.<p>Analysts have pointed out that Trump-led administration’s measures including policy uncertainty, tariff measures, have led to recession fears in the US, a major obstacle to growth for India’s software firms.</p>.<p><strong>Selective hiring to continue</strong></p>.<p>Indian IT companies had posted negative net addition for six straight quarters until the first quarter of FY25 (April-June 2024), following which hiring had picked up moderately. However, Q3 was disappointing again as some failed to meet their hiring targets while others projected similar hiring numbers for fiscal year 2026.</p>.Dabur sees contraction in Q4 profit, decline in India revenue; shares tumble to 52-week low.<p>For FY25, on an overall net level, there could be selective additions. However, experts do not anticipate hiring activity to pick up. “Top talent hunt is expected to continue. Selective hiring is likely to continue for top categories, especially in high-demand areas like artificial intelligence, where delivery units reward exceptional talent,” said Nabanita Dutta - Head, Media Content and Technical Research, Anand Rathi Wealth. </p>.<p><strong>No recovery in discretionary spends</strong></p>.<p>While companies had pinned their hopes on US President Donald Trump’s supportive policies consequently leading to a pick up in client budgets, the picture has soured now. Tariff imposition has led to fears of inflation and a recession, owing to which clients will be cautious resulting in budget cuts and delays in large transformation deals. </p>.<p>Hence, hopes of a rebound in the discretionary spends which was somewhat picking up, as the management of the IT companies highlighted in the previous quarters, will again take a backseat. IT budgets of clients fluctuate with their profit and experts are unsure about when it will pick up. </p>.<p>Another continued hurdle for the sector is the contracting deal size and widening lag periods, impairing revenue flows. This means that even though clients are signing deals, they are going a little slow in terms of expenditure. “Clients are holding their budget and are not releasing it until and unless they are seeing any specific value for that particular investment,” added Maity. </p>.<p>However, given the companies’ investment in generative artificial intelligence (Gen AI), those deals are likely to provide an upside. Most of these deals are in proof of concept (POC) stage, but will be capitalised this year (FY26) onwards and contribute to their revenue, though not significantly. </p>.<p>All major Indian IT stocks and the Nifty IT index had tumbled around 3-3.5% on Friday over fears of a US recession. Meanwhile, the share price of IT major Tata Consultancy Services (TCS ) hit a 52-week low.</p>