India’s $280 billion IT services industry is set to post a lacklustre first-quarter performance for FY25, with top-tier firms likely to report flat to marginal revenue growth amid prolonged decision cycles and cautious tech spending by global clients, reported ET, citing analysts.Among the top six IT firms, Tata Consultancy Services (TCS), HCLTech, Wipro, and Tech Mahindra are projected to deliver either low single-digit growth or even a year-on-year decline in constant currency for the April–June quarter, according to ET.Infosys and LTIMindtree, however, are expected to see modest revenue upticks of around 2 per cent, supported by comparatively better execution, according to at least three brokerage reports.TCS is scheduled to kick off the earnings season with its results on July 10.Second-tier players like Coforge, Persistent Systems, Hexaware, and Mphasis are forecast to outperform, while others, including LTTS, Birlasoft, Cyient, Tata Technologies, and Tata Elxsi could feel the pinch of the ongoing slowdown in logistics, manufacturing, auto, and retail sectors.“We believe that the quarter will be a mixed one,” said Kotak Institutional Equities in its report, according to ET. “Mid-tier IT services providers will report strong growth, but large IT firms and ER&D companies will disappoint.” Kotak also noted that while the deal pipeline in the automotive segment remains healthy, the pace of deal conversion and ramp-up has been slower than anticipated.In the BFSI segment, analysts see early signs of recovery. The sector has shown strength through modernisation efforts, digital transformation initiatives, and a relatively low impact from recent tariff actions. However, deal activity overall appears sluggish, with 10–15 per cent of contracts either delayed or under review.A recent Emkay Research note suggests Infosys and HCLTech may revise their FY26 constant currency revenue growth guidance to 1–3 per cent and 3–5 per cent, respectively, while maintaining operating margin targets of 20–22 per cent and 18–19 per cent. Wipro may offer Q2FY26 growth guidance between -1 per cent and +1 per cent.“Companies have stretched every lever to defend margins, including tight control on travel, other discretionary costs, and in a few cases pulling back variable compensation,” Kotak noted. They added that a recovery in discretionary spending will be essential for margin protection in the medium term.On profitability, margin performance is expected to vary across the board. According to Nomura, TCS may face weaker utilisation due to a ramp-down in its BSNL project, Infosys could see a dip due to senior-level wage hikes and increased travel, and HCLTech might face seasonal pass-through costs. Wipro’s margins may come under pressure due to higher provisions for doubtful debt linked to client-specific issues, while Tech Mahindra and LTIMindtree may see gains from cost optimisation measures.Mid-cap standout Coforge is expected to post a sequential margin improvement of 40 basis points. Mphasis and Persistent Systems are likely to maintain stable margins, Nomura said.Despite the softness in earnings, analysts noted signs of demand stability in the BFSI and retail segments, with potential productivity boosts from GenAI-driven solutions offering a positive outlook. These expectations are reflected in the BSE IT index’s recent recovery — up 3.7 per cent over the past month and 7.7 per cent in the last three months after dipping in early April, reported ET.