India's IT majors face a pivotal moment as strong deal pipelines mask weakening revenue momentum. While Infosys and HCLTech delivered their strongest three-year growth at 4.6% and 6% respectively in FY26, both posted worse-than-expected sequential declines in Q4. TCS reported its first revenue contraction since listing in 2004. The real concern lies in conservative FY27 guidance, with HCLTech projecting just 1.5-4.5% growth and Infosys guiding 1.5-3.5%, both significantly below market expectations. AI disruption risks are mounting as revenue growth slips to mid-single digits. Valuations have compressed to around 20 P/E multiples from mid-to-high 20s, raising questions about further downside. Investors should monitor whether these valuations adequately reflect the structural challenges ahead.
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