Global Uncertainty Casts Dark Cloud Over Indian IT Sector

The Indian IT sector faces challenges as global uncertainties and US market slowdowns impact growth prospects. Analysts predict weak FY25 results and cautious FY26 guidance, with discretionary spending and verticals like retail under pressure. However, potential demand growth from AI technologies offers hope for future recovery.

The Indian IT industry is bracing for challenging times amid rising global uncertainties and a slowdown in the US market, its largest revenue source. Analysts anticipate a weak ending for FY25 and cautious guidance for FY26, with discretionary spending likely affected.

Market observers warn of potential negative news in the coming months, including earnings cuts and guidance pullbacks. Retail and manufacturing sectors could be hardest hit, but some maintain that "survival spend" and demand for GenAI could drive eventual recovery.

As major IT players prepare to release earnings reports, the sector grapples with economic pressures and the US tariff offensive. Despite near-term volatility, experts speculate that AI demand might stabilize macroeconomic conditions, highlighting the sector's evolving landscape.

(With inputs from agencies.)