TCS to Infosys: Why wage hikes, AI disruption signal a ‘perfect storm’ for tech giants in Q1FY27

India’s top IT companies are set to kick off the Q1 FY27 earnings season. The expectation is fairly glum as Artificial intelligence (AI) led pricing pressure, Middle East war and a challenging demand environment continue to weigh on the sector.

Companies are expected to report muted revenue growth, likely guidance cuts and mixed margin performance.

Key brokerage houses like Kotak, Motilal Oswal and Nomura expect IT firms to face pressure on profitability as annual salary hikes, continued investments in AI and currency-related headwinds offset the benefits of cost-saving measures and a depreciating rupee.