For IT companies, will 2026 be a year of healing?

Subscribe to enjoy similar stories. The Nifty IT index has risen around 10% over the past two months, driven by rupee depreciation and expectations of a recovery in discretionary technology demand. The December quarter (Q3FY26) is almost over, and collectively, the first three quarters of FY26 have shown no clear signs of easing in the earnings downgrades cycle of Indian IT services providers.

Revenue visibility for Q4 remains bleak amid prevailing client caution and global macro-economic uncertainty. Plus, the latest cue–global technology giant Accenture's quarter ending November (or Q1FY26) results–is hardly encouraging. Accenture competes with tier-1 IT companies in the managed services (outsourcing) business, so it is often seen as an indicator of future performance.

Its Q1FY26 constant currency revenue grew 5% year-on-year, at the upper-end of its 1-5% guidance band and beating analysts’ estimates. Growth was largely led by the financial services sector. Managed services continued to outperform the consulting business.

Deal wins saw a decent 10% year-on-year growth with bookings at $20.9 billion. Still, it maintained its FY26 growth guidance at 2-5% (this excludes an estimated 1% impact from its US federal business). The Accenture management said, overall, the demand environment has not meaningfully changed —neither positively nor negatively and clients are prioritizing large, strategic transformation programs over discretionary initiatives.

“Despite Q1 beat, unchanged guidance suggests a weaker H2 versus H1, which coincides with Indian IT’s H1. This is a negative read-across for street hopes of a sharp rebound," said a 19 December Ambit Capital report. Considering Accenture’s FY26 guidance and macro commentary,