Mumbai, Aug 26: India’s information technology sector is expected to maintain steady growth in FY27, with revenue growth projected at around 6 per cent, supported by technology exports, rising adoption of artificial intelligence (AI) and continued policy support.
According to a report by Brickwork Ratings, the sector’s revenue growth is estimated at 6.1 per cent in FY26 and is expected to remain stable at 6 per cent in FY27. India’s IT services exports reached around $418 billion in FY26.
The sector is also expected to see an improvement in profitability. Operating margins are projected to rise to 21.8 per cent in FY27, while the debt-to-equity ratio is expected to decline to 0.1. Debt service coverage is projected to improve to 16.8, indicating a stable financial position for the sector.
India’s IT industry is gradually shifting from traditional volume-based outsourcing towards higher-value digital services. AI, automation, cloud technologies and other emerging digital solutions are becoming increasingly important sources of growth for technology companies.
The first quarter of FY27 has started on a relatively cautious note, with large IT companies reporting modest growth in constant-currency terms. Revenue growth in rupee terms received some support from currency movements, while margins remained under pressure due to salary increases and continued investments in AI skills and technology.
Mid-sized IT companies have shown comparatively stronger growth, supported by new business wins and increasing demand for AI-led services. Continued deal activity is expected to support the sector’s growth prospects in the coming quarters.
India’s expanding AI capabilities are also strengthening its position in the global technology market. The country ranks second globally in AI skill development, while the IndiaAI Mission has supported the deployment of more than 38,000 GPUs.
The growth of Global Capability Centres (GCCs) is providing another important opportunity for the Indian IT sector. More than 1,700 GCCs are using India’s domestic data-centre infrastructure, with the segment growing by more than 20 per cent annually.
Policy measures are also expected to provide support to the industry. The 15.5 per cent common safe-harbour margin for consolidated IT categories introduced in the Union Budget 2026-27 is among the measures aimed at supporting the sector.
However, the industry remains exposed to risks because of its dependence on international markets. The US and Europe accounted for 52.9 per cent and 32.8 per cent, respectively, of IT spending in FY25. Any slowdown in technology spending in these markets could affect Indian IT companies.
Overall, India’s IT sector is expected to maintain a stable growth path in FY27, supported by AI adoption, digital transformation, technology exports, new deal wins and the continued expansion of Global Capability Centres.