Rising global headwinds to slow Indian IT sector momentum in FY26: Nomura

ANI April 12, 2025 156 views

Nomura has released a cautionary report about the Indian IT sector's growth prospects in the upcoming financial year. The research suggests that large-cap IT companies will likely face a challenging environment with potentially subdued revenues. Macroeconomic uncertainties, particularly around US trade policies, are expected to moderate growth trajectories. Despite a partial recovery in discretionary spending during FY25, the sector may experience slower expansion in FY26.

"We lower our FY26F revenue growth outlook by 230-350 bp for large-cap Indian IT services companies" - Nomura Report
New Delhi, April 12: Rising macroeconomic uncertainties will impact the growth of information and technology (IT) companies in the financial year 2026 (FY26), Nomura said in its latest report.

Key Points

1

Macroeconomic uncertainties expected to impact IT sector growth

2

Financial services vertical shows partial recovery

3

US tariff concerns influencing client spending decisions

4

Accenture signals potential revenue growth challenges

The report says that the large-cap IT companies will have a subdued quarter, with all companies likely posting a sequential drop in revenues.

"Rising macro uncertainty to weigh on growth in FY26F," the report added.

The report points out that the financial year 2025 (FY25F) was a year of growth recovery for most Indian IT companies. This recovery was supported by a partial rebound in discretionary spending, particularly within the financial services vertical.

However, rising macroeconomic uncertainty--driven in part by concerns around US tariffs--is expected to weigh on client decision-making and potentially moderate the pace of revenue growth improvement in FY26F.

The first half of the fiscal year typically plays a critical role in shaping the growth trajectory, and Indian IT companies are likely to begin FY26F with a soft Q1, influenced by a series of recent macro events.

The report adds that Accenture's recent results suggest an improvement in revenue growth in FY26F compared to FY25, with its organic growth guidance implying a 400 basis point year-over-year increase.

However, the company has also cautioned that heightened macro uncertainty could lead clients to adopt a more conservative stance on IT spending.

The financial services firm lowered its forecast for financial year 2026 for the Indian IT companies.

"We lower our FY26F revenue growth outlook by 230-350 bp for large-cap Indian IT services companies, acknowledging rising risks of macro slowdown in the US," the report adds.

On April 2, US President Trump announced a widespread imposition of tariffs on countries worldwide.

In February, soon after taking charge for the second time, Trump outlined a new trade policy focused on fairness and reciprocity and said that the US would implement reciprocal tariffs, charging other countries the same tariffs they impose on American goods.

Reader Comments

R
Rahul S.
This is concerning news for IT professionals. I work at one of these companies and we've already seen some projects getting delayed. Hope this is just a temporary slowdown 🤞
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Priya M.
The US tariffs situation is really creating uncertainty across industries. IT sector has been resilient before - hopefully they'll find ways to adapt to these challenges again.
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Amit K.
Interesting analysis but I think Nomura might be overestimating the impact. Indian IT has weathered many storms before and emerged stronger. The digital transformation wave isn't going away anytime soon.
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Sanjana P.
As someone who tracks this sector closely, I appreciate Nomura's balanced view. They acknowledge the FY25 recovery while flagging real concerns for FY26. The 230-350 bp reduction seems measured and realistic.
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Vikram D.
The article mentions financial services vertical rebounding - that's good news at least! Maybe companies should double down on banking/fintech solutions to offset other slowdowns? 💡

We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.

Tags:
Indian IT Sector Nomura Macroeconomic Uncertainty IT Services FY26 Forecast US Tariffs Technology Spending
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