Indian IT companies' revenue growth to stay at 4-6%: ICRA

New Delhi

Indian IT services companies are expected to post a moderate revenue growth of 4-6% in US dollar terms for the financial year 2026 (FY26), according to a new projection by ICRA. The credit rating agency also said that attrition rates are likely to stabilize around 12-13% in the near term.

ICRA noted that hiring activity will remain low until growth momentum improves by the end of FY26. Operating profit margins (OPM) for the sector are projected to remain steady at 22.5-23% over the next few quarters.

Deepak Jotwani, Vice President & Sector Head, ICRA, said, "The growth momentum for ICRA's sample set of IT services companies is likely to remain muted over the near term, owing to the looming uncertainty related to the imposition of US trade tariffs and macroeconomic headwinds across the key markets of the US and Europe."

ICRA’s sample set reported a 3.6% year-on-year growth in USD terms during the first nine months of FY2025, helped by rising demand in BFSI, retail, and GenAI-related projects.

Attrition has fallen to 12.8% in Q3 FY2025 from 22.3% in Q3 FY2023, while employee costs have slightly reduced. Companies are focusing on AI-driven solutions to boost productivity and optimize costs, but near-term revenue pressure and slow deal closures remain a challenge.