The sustainable growth of India’s IT services sector is likely to be within 4 to 5 per cent, above the trendline of the past three years, a report said on Friday. Analysts assumed less macro volatility in the coming quarters and expected some recovery in growth in FY27, the report from HSBC Global Investment Research said.

The IT services sector is unlikely to see a turnaround in Q2 of FY26, with demand remaining soft amid macroeconomic uncertainty and the deflationary impact of artificial intelligence, it said. These factors may not improve until FY27, in our view, as global headwinds provide a cushion to pricing pressure, the report added, providing a ‘buy’ rating on many IT stocks.

Growth in the second quarter is expected to stay in line with the first quarter, driven largely by vendo

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