IT firms brace for muted Q2 amid weak demand

IT services firms are preparing for another subdued quarter as global macro uncertainty, tight discretionary budgets, and cautious client spending weigh on what is usually a seasonally stronger period. The recent changes to US H1-B visa rules have further added to the sector’s unease, limiting near-term optimism.

Analysts expect the July-September quarter numbers to show muted sequential growth, with large-cap firms likely to report flat to marginal constant currency (CC) expansion of up to 1.8%. Mid-tier firms could fare slightly better, supported by cost-optimisation work and early traction in AI and digital transformation deals.