Infosys and HCLTech may both trim their FY27 growth guidance, according to a new note from brokerage Motilal Oswal published Wednesday. The brokerage expects Infosys to cut the top end of its guidance by 50 basis points and HCLTech to cut its services growth guidance by 100 basis points.

The call comes as Motilal Oswal flags a weak start to the fiscal year across India’s IT services sector, with the softness likely to carry into the second quarter as well.

Why the guidance cuts are coming

Motilal Oswal expects constant-currency growth of negative 1.5 percent to 2 percent for large IT companies in the first quarter of FY27. It sees a wider range, negative 1 percent to 4.8 percent, for mid-cap firms.

The first half of the year is running below the pace needed to hold the upper end of most companies’ full-year guidance bands. That gap is why the brokerage thinks Infosys and HCLTech will use their upcoming earnings calls to quietly walk back some of their more optimistic targets.

Which parts of the business are holding up

Not every vertical is struggling equally. Banking, financial services, and insurance clients remain the most resilient part of the demand picture, supported by steady deal ramp-ups. Hi-tech clients are mixed, with AI-related project work offsetting weakness elsewhere in the same portfolios.

Telecom demand stays soft, and manufacturing clients show an uneven picture across the auto and industrial segments, echoing the same European auto weakness that hit KPIT Technologies this week.

Pricing pressure adds to the squeeze

Some of the weakness traces back to competitive intensity and pricing pressure in a market where demand is already soft. Motilal Oswal expects that dynamic to continue as AI productivity gains get passed on to clients as lower prices, rather than kept as margin by the IT vendors.

For an industry that built its scale on billing more hours, the shift toward AI-driven efficiency is starting to show up directly in guidance numbers, not just in boardroom conversations.

Investors will get the real answer within weeks, when Infosys and HCLTech report June quarter results and either confirm or push back on Motilal Oswal’s call.