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AI Deals Could Drive Medium-Term Growth as Indian IT Faces Muted Q2FY27: Centrum Report

Centrum’s Q2FY27 estimates point to uneven near-term growth for Indian IT services, while AI-related deals could contribute to medium-term expansion.
From TheFinanceBase Team3 min to read
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Centrum expects a muted Q2FY27 for Indian IT services, even as AI-related deals may become a source of medium-term growth. Its outlook, summarized by The Economic Times on October 5, 2026, is a brokerage forecast—not reported quarterly results or company guidance.

Why Centrum expects a muted Q2FY27

The report describes demand as broadly unchanged over the preceding three months. Clients remain cautious about adopting AI and are taking longer to make decisions, limiting near-term growth despite continued deal activity.

Bookings are expected to remain healthy, with a strong pipeline across most IT services companies. But recent contracts are focused largely on cost optimisation and vendor consolidation, and their conversion into revenue remains soft as signed deals ramp gradually. A healthy order book therefore does not necessarily translate into a strong quarter immediately.

Sector conditions vary: Centrum notes a marginal improvement in discretionary technology spending in banking, financial services and insurance (BFSI) and technology, while manufacturing and automotive remain weak. These are sector-level observations, not claims about every client or company.

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Centrum’s sequential revenue growth estimates

The figures below are Centrum’s estimates of sequential revenue growth in US dollars for Q2FY27, as reported by The Economic Times in 2026. They are forecasts, not realized results. Coforge’s figure is explicitly organic; the article does not provide a comparable company-level breakdown of AI exposure.

Tier 1 companies

Company Estimated sequential US-dollar revenue growth
TCS 0.4%
Infosys 1.1%
HCL Tech 1.9%
Wipro -0.6%
Tech Mahindra 1.3%

Selected Tier 2 companies

Company Estimated sequential US-dollar revenue growth
LTIMindtree 1.1%
L&T Technology Services 1.7%
Coforge 3.1% organically
Persistent Systems 6%
Mphasis 1.9%
Happiest Minds 2.3%

Among the Tier 1 names listed, Centrum’s estimates span from a 0.6% sequential decline for Wipro to 1.9% growth for HCL Tech. Persistent Systems has the highest estimate among the selected Tier 2 companies shown. These comparisons concern projected revenue growth, not the amount of AI business each company has won; the article does not establish an AI-deal ranking.

How AI deals could matter over the medium term

Centrum’s argument is that AI deal traction may support growth beyond the near-term softness. The report says, “AI led deals to be significant drivers of incremental business growth in the medium term,” as quoted by The Economic Times on October 5, 2026.

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The distinction is between opportunity and conversion. Clients’ cautious adoption and longer decision cycles can delay revenue even when the pipeline is strong. The report sees AI-related deals as a potential growth driver, but it does not say that this opportunity will remove current conversion delays or deliver a specified growth rate.

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Centrum also estimates that the AI-led services market could reach USD 300–400 billion by 2030. This is a brokerage forecast; the Economic Times summary does not give its methodology or assumptions, so it should not be read as a measured market size or a guaranteed outcome.

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Margins: currency support meets AI investment

Centrum expects operating margins to remain broadly stable in Q2FY27. The report says the rupee depreciated 1% against the US dollar during the quarter, which can support margins in part, while investment in AI may offset some of that benefit. The article gives no company-by-company margin estimates.

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Companies are also pursuing margin improvement through greater use of AI tools, higher utilisation and changes to employee mix. These are levers cited in the brokerage summary, not evidence that every company has already achieved a margin gain.

What to watch in company updates

Management commentary can help show whether pipeline strength is beginning to translate into business and whether the near-term outlook is changing. Centrum’s cited indicators include:

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  • Demand conditions and the pace of client decisions.
  • FY27 revenue and margin guidance.
  • Deal bookings and how quickly signed contracts ramp into revenue.
  • Offshoring, hiring and utilisation trends.

The report characterizes the FY27 outlook as improving incrementally, with growing traction in AI-related deals. The original Centrum report was not available in the cited summary, so its forecast assumptions and definitions cannot be assessed from that account alone.

Product prices and availability are accurate as of the date/time indicated and are subject to change. Any price and availability information displayed on Amazon at the time of purchase will apply.

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