{
  "id": 11861117,
  "title": "IT Sector Faces Muted Q2 Results, Slow Deals And AI Pricing Pressure Weigh On Growth",
  "url": "https://urgent.news/2026/10/04/it-sector-faces-muted-q2-results-slow-deals-and-ai-pricing-pressure",
  "topic": "finance",
  "section": "Finance & Markets",
  "published": "2026-10-04T05:31:01.000Z",
  "source": {
    "name": "Free Press Journal",
    "slug": "free-press-journal",
    "url": "https://www.freepressjournal.in/business/it-sector-faces-muted-q2-results-slow-deals-and-ai-pricing-pressure-weigh-on-growth"
  },
  "original_language": "en",
  "account": "Indian IT firms are anticipated to deliver a disappointing second quarter, from July to September, even though this period typically proves lucrative. Analysts predict slow deal closures, cautious clients, and reduced spending on new technology initiatives will hinder expansion. HDFC Securities attributes global economic uncertainty to delayed client decisions. Moreover, companies grapple with pricing pressures as customers attempt to reap savings from artificial intelligence in new contracts and renewals. Quarterly revenue growth for major IT firms is forecasted to experience a decline of 0.4 percent, to an increase of 2 percent in constant currency terms, which excludes exchange rate fluctuations. Mid-sized entities may experience growth ranging from 0.6 percent to 6.3 percent, with acquisitions contributing to certain gains. Despite the first half falling short of expectations, recovery in FY27 hinges on the second half. However, the third quarter usually witnesses fewer working days due to client holidays and temporary work breaks, dampening optimism. IT companies contend that businesses struggle to directly apply generative AI in intricate systems and tightly regulated sectors, rendering technology service providers crucial for integrating novel tools with existing operations. While fresh AI-focused contracts help mitigate an anticipated 6 to 7 percent reduction in revenue stemming from AI-driven efficiencies, converting these prospects into business remains sluggish. NSE IPO Listing: Shares Rise 5% After Flat Market Debut New contracts frequently tie payments to outcomes, while renewals often occur at reduced prices. The weaker rupee, improved operational efficiency, and increased staff utilization might assist in absorbing salary hikes. Although valuations are near historical minimums and cash generation remains appealing, apprehensions surrounding AI-related revenue pressure persist in dampening investor confidence. Analysts anticipate that sentiment will remain fragile, with increasing global bond yields, higher crude prices, and substantial foreign investor selling adding to pressure on Indian equities.",
  "summary": "New Delhi: Indian IT companies are expected to report a weak quarter for July to September, despite the period usually being strong for business. Slow deal wins, cautious clients and limited spending on optional technology projects are likely to weigh on growth, analysts said. HDFC Securities said global economic uncertainty continues to delay client decisions. Companies also face pricing…",
  "key_points": [],
  "editors_take": null,
  "illustration": null,
  "coverage": {
    "outlets": 1,
    "also_reported_by": []
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}