New Delhi: The Indian information technology (IT) sector is expected to see a revenue growth of 4 to 5 percent in the financial year 2026-27. This rise may also lead to a notable increase in earnings per share for IT companies.
A report by HSBC Global Investment Research highlighted that IT company shares have risen approximately 15 percent from their lows. Despite this, the IT sector’s stock performance in 2026 is projected to align closely with the overall stock market.
The report further noted that the IT sector is no longer growing at the rapid pace seen previously. Future growth is anticipated to be somewhat slower compared to earlier years.
Investors should be prepared for increased volatility in IT stocks in the near future, and careful attention along with timely decision-making will be essential.
According to the report, a recovery in the IT sector could be observed again in 2026 or 2027, potentially leading to further gains in stock prices.
Weak seasonal results impacted the third quarter of financial year 2026, with limited expectations for significant positive outcomes. Indicators from different companies have remained mixed.
Yogesh Agarwal, Head of Research at HSBC India, mentioned that initial expectations were for the IT sector to outperform the market in 2026. This was based on anticipated better growth, fair valuations, and a slowdown in growth over the past three years.
He pointed out that IT shares rose by about 15 to 20 percent between October and December 2025, while the Nifty index gained only 6 percent during the same period. This supports hopes for improvements in the sector’s fundamental factors in FY 2026 or 2027.
The report also stated that customer confidence in IT companies has improved, suggesting higher future spending on IT services.
Additionally, the impact of cost reductions due to artificial intelligence (AI) technology is becoming evident. AI is also opening new revenue opportunities for companies.
Another report by Motilal Oswal Financial Services expressed a positive outlook for IT services in the medium term. It noted that as the global economic situation stabilises, spending on technology is expected to increase. Focus on digital transformation, AI technologies, and improving work efficiency can further benefit the IT sector.
My name is Ganpat Singh Choughan. I am an experienced content writer with 7 years of expertise in the field. Currently, I contribute to Daily Kiran, creating engaging and informative content across a variety of categories including technology, health, travel, education, and automobiles. My goal is to deliver accurate, insightful, and captivating information through my words to help readers stay informed and empowered.
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