{
  "id": 3490600,
  "title": "IT sector revenue growth to remain stable at 6% through FY27: Brickwork Ratings",
  "url": "https://urgent.news/2026/08/26/it-sector-revenue-growth-to-remain-stable-at-6-through-fy27-brickwork",
  "topic": "business",
  "section": "Business",
  "published": "2026-08-26T10:34:34.000Z",
  "source": {
    "name": "Hindu BusinessLine",
    "slug": "hindu-businessline",
    "url": "https://www.thehindubusinessline.com/news/it-sector-revenue-growth-to-remain-stable-at-6-through-fy27-brickwork-ratings/article71392290.ece"
  },
  "original_language": "en",
  "account": "India's IT sector is expected to maintain a stable growth rate of 6% through fiscal year 2027 (FY27), according to Brickwork Ratings. The industry has transitioned from volume-based contracts to high-value digital services, propelled by hyper-automation and artificial intelligence (AI). In fiscal year 2026 (FY26), the sector generated $418 billion in services exports, with revenue growth estimated at 6.1%, and projected to remain steady at 6.0% in FY27. Early indications from the sector's leading companies validate this forecast, with tier-1 firms reporting modest low-single-digit growth in constant currency terms. However, revenue in rupee terms saw a boost due to currency depreciation. Margins have been under pressure due to annual wage hikes and ongoing investments in AI talent. Mid-sized firms have fared relatively better, with steady deal wins and rising AI-led revenue helping sustain the medium-term outlook.\n\nBrickwork Ratings maintains a stable credit outlook for the sector, driven by robust technology exports, AI adoption, and policy support. However, the outlook is contingent on operational realignment and investment in specialized capabilities to adapt to AI-led developments. India's second position globally in AI skill development and the deployment of over 38,000 GPUs under the India AI Mission are bolstering the sector's transformation. The ratings agency also highlights that more than 1,700 Global Client Groups (GCCs) are leveraging domestic data-center capacity, expanding at an annual rate of over 20%. The sector benefits from a 15.5% common safe harbor margin for consolidated IT categories, introduced in the Union Budget 2026-27, as stated by Rajeev Sharan, Head of Research at Brickwork Ratings.\n\nOperating margins are projected to moderate to 20.1% in FY25 as companies absorb increased costs of specialized AI talent. However, as digital investments mature and automation improves efficiency, margins are expected to recover to 21.8% in FY27. Geographical concentration risk exists, with the United States and Europe accounting for 52.9% and 32.8% of IT spending in FY25, respectively. Nonetheless, the rapid adoption of AI necessitates continuous investment in skills to mitigate potential skill obsolescence.",
  "summary": "The sector recorded $418 billion in services exports in FY26, while revenue growth is estimated at 6.1 per cent",
  "key_points": [
    "India's IT sector to maintain 6% growth rate through FY27",
    "Revenue in FY26 reached $418 billion, projected at 6.0% in FY27",
    "Margins pressured by wage hikes and AI talent investments"
  ],
  "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."
}