TCS, Infosys, Wipro and HCLTech likely to begin FY27 with muted quarter as AI, weak demand weigh on growth

India's top information technology services companies are expected to begin FY27 on a subdued note, with artificial intelligence-led pricing pressure, restrained client spending and global geopolitical uncertainty continuing to weigh on business performance, as per a Reuters report.The earnings season for the sector will begin with Tata Consultancy Services (TCS) on July 9, followed by Infosys, HCLTech and Wipro later this month. Although the April-June period is typically supported by higher billing days and the commencement of new projects, brokerages expect demand to remain soft during the quarter.According to estimates from nine brokerages compiled by Reuters, the country's six largest IT companies are expected to post around 14% year-on-year revenue growth in rupee terms and a 12-13% increase in net profit. However, much of the reported growth is expected to come from the depreciation of the rupee. In constant currency terms, which excludes foreign exchange movements, revenue growth is projected at just 2.8%.Also read: India's digital economy: Where the country ranks across 8 global indicesThe sector is also adjusting to changing enterprise technology spending as organisations increasingly deploy AI tools and AI agents to improve productivity and reduce software development costs. The shift is putting pressure on traditional pricing models while prompting IT services companies to expand their AI offerings.Nomura, in its earnings preview, described the sector as facing a "perfect storm", citing AI-led pricing pressure alongside uncertainty arising from geopolitical tensions in the Middle East. PL Capital said slower client decision-making and longer sales cycles were delaying revenue conversion and project execution across sectors such as consumer, technology and telecom.Companies have also moderated hiring while increasing investments in AI capabilities. TCS Chairman N. Chandrasekaran recently said the company could eventually have as many AI agents as employees, reflecting the growing role of automation in IT services.Investors will also closely track annual guidance during the earnings season. Reuters reported that some brokerages expect Infosys and HCLTech to narrow or trim the upper end of their revenue growth guidance if demand conditions remain weak.The sector has faced sustained pressure in the equity markets this year, with concerns over AI disruption and slowing technology spending weighing on sentiment.