I.T. Sector In Focus As Q3 Earnings Begin: Growth Muted, Eyes On CY26

The IT sector is back in focus as companies prepare to kick off Q3 earnings season, with brokerages flagging a muted outlook. Reports suggest December-quarter performance will be impacted by seasonal furloughs and wage hikes, while the Q2 recovery is seen as temporary. Growth is expected to remain subdued, with large-cap IT companies likely to post 0.3–2.3% QoQ constant currency growth, while mid-caps may see a wider range of outcomes. Demand remains cautious amid macro uncertainty and delayed client spending, especially on large transformation projects. However, attention is gradually shifting toward CY26 client budgets, deal pipelines, and AI-led opportunities. With valuations now reasonable, experts believe long-term investors may find selective opportunities, particularly in mid-cap IT names, despite near-term challenges.