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Fix the driver behind crashes, sound loss and screen glitchesFind Drivers →Repair Windows errors before they cause bigger problemsFix Now →Scan for outdated or missing drivers - takes under a minuteDriver Scan →Centrum expects a muted Q2FY27 for Indian IT services, but says AI-related deal traction could become a medium-term growth driver. The forecasts are brokerage estimates reported by The Economic Times on October 5, 2026—not company guidance or reported quarterly results.
Why does Centrum expect muted Q2FY27 growth?
The report describes demand as broadly unchanged over the preceding three months. Clients are cautious about adopting AI and are taking longer to make decisions, limiting the pace at which potential demand turns into near-term revenue.
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Deal activity and revenue recognition are moving at different speeds. Centrum expects healthy bookings and a strong pipeline across most IT services companies, but says recent deals are focused largely on cost optimisation and vendor consolidation. Total contract value is converting to revenue softly, while signed deals ramp gradually.
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Spending signals vary by sector: the report notes a marginal improvement in discretionary technology spending in banking, financial services and insurance (BFSI) and technology, while manufacturing and automotive remain weak. These are broad sector observations, not claims about every company or customer.
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What sequential revenue growth does the report estimate?
The figures below are Centrum’s estimates for sequential US-dollar revenue growth in Q2FY27, as reported by The Economic Times. They are forecasts, not realized results. “Organic” is specified for Coforge only; the article does not provide a comparable organic qualification for the other companies.
Tier 1 companies
| Company | Estimated sequential US-dollar revenue growth |
|---|---|
| TCS | 0.4% |
| Infosys | 1.1% |
| HCL Tech | 1.9% |
| Wipro | -0.6% |
| Tech Mahindra | 1.3% |
Selected Tier 2 companies
| Company | Estimated sequential US-dollar revenue growth |
|---|---|
| LTIMindtree | 1.1% |
| L&T Technology Services | 1.7% |
| Coforge | 3.1% organically |
| Persistent Systems | 6% |
| Mphasis | 1.9% |
| Happiest Minds | 2.3% |
Among the listed Tier 1 companies, the estimates span a 0.6% sequential decline for Wipro to 1.9% growth for HCL Tech. Persistent Systems has the highest estimate among the selected Tier 2 names at 6%. These company-level growth estimates do not establish which businesses have the greatest AI exposure; the article gives no comparable company-by-company breakdown of AI deal exposure.
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How could AI deals affect medium-term growth?
Centrum’s argument is that AI-related work may add to growth over time even if client caution and slow deal ramps constrain the near term. The report says, “AI led deals to be significant drivers of incremental business growth in the medium term,” as quoted by The Economic Times on October 5, 2026.
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The article also reports Centrum’s estimate that the AI-led services market could reach USD 300–400 billion by 2030. This is a brokerage forecast; the article does not provide its methodology or assumptions. It should not be read as a measured market size or a guaranteed outcome.
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The distinction between bookings and revenue matters to this outlook: a healthy pipeline signals potential future work, but gradual ramps mean bookings alone do not show when, or how quickly, that work will appear in reported revenue. The reported estimate does not establish that AI deals will immediately offset muted quarterly growth.
What does the report say about margins?
Centrum expects operating margins to remain broadly stable in Q2FY27. The report summary says the rupee depreciated 1% against the US dollar during the quarter, supporting margins in part, while AI investment could offset some of that benefit.
Companies are also seeking margin improvement through greater use of AI tools, higher utilisation and changes to employee mix. The report does not quantify how much any one of these factors may contribute.
What should investors watch next?
Management commentary can help indicate whether the expected improvement is developing into business momentum. The article identifies these areas to follow:
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- Demand conditions and the pace of client decision-making.
- FY27 revenue and margin guidance.
- Deal bookings and whether signed work begins converting into revenue more quickly.
- Offshoring and hiring trends.
Centrum characterizes the sector outlook as improving incrementally in FY27, alongside growing traction in AI-related deals. That remains an outlook rather than a confirmed sector-wide recovery. The Economic Times summary attributes the projections to Centrum; the original report’s methodology and forecast assumptions are not available in that article.
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