IT Q2 Preview: AI deflation likely to curb revenues; TCS, Infosys set for subdued quarter

India Inc is entering the Q2 earnings season and the focus is again on the IT services sector, typically among the first ones to declare their results. Given the current challenges, including a weak rupee, high yield and ongoing geopolitical challenges, it would be interesting to see how big tech giants are navigating AI-led deflation and weak demand.

The Nifty IT index has gained 6.52% over the past three months, outperforming the broader market. But can IT companies deliver a similar performance on the earnings front? Kotak Institutional Equities expects another muted quarter for large IT companies, saying that “demand conditions have neither improved nor deteriorated since the June 2026 quarter.”