BENGALURU: Indian IT firms are expected to deliver a moderate performance in a seasonally weak Dec quarter, weighed down by furloughs (lesser number of working days in Dec). Demand remained subdued, with only limited recovery in discretionary spending, and growth was largely driven by clients’ cost-optimisation priorities. Brokerages estimate that enterprise technology spending is likely to remain broadly stable in 2026. However, clients are yet to loosen their wallets for incremental spending on large transformation projects. Elara Capital’s commentary indicates that midcap IT firms are likely to outperform large caps in Q3. Coforge and Persistent Systems are expected to post strong sequential dollar revenue growth of around 3%. LTIMindtree and Mphasis should follow, with dollar revenue growth in the 1-2% range. Mphasis’ revenue is expected to grow about 1% quarter on quarter, led by media & telecom and insurance, while BFSI may see some impact from furloughs. LTIMindtree may report around 2% sequential dollar revenue growth, driven by manufacturing and retail, even as BFSI is likely to be affected by furloughs.Motilal Oswal estimates that midcaps are expected to outperform once again, with a growth range of -2.5% to 3.5%. Kotak Equities said seasonal trends should drive a strong performance at HCLTech (2.8%) and a weak performance at Infosys (0.3% sequential decline). Organic revenue growth at TCS, Wipro and Tech Mahindra is expected to be in the 0.3-0.9% range.
