According to reports, large Indian IT service providers are expected to announce muted sequential results in a typically strong second quarter, as macroeconomic headwinds continue to weigh on global discretionary spending.

The big earnings week for tech heavyweights is coming up, with Tata Consultancy Services (TCS) reporting on October 11 and Infosys and HCL Technologies reporting on October 12.

Analysts following the sector are bracing for a poor sequential performance by the large IT-pack, predicting that the downturn witnessed in Q1 would likely endure, with no meaningful signs of recovery or deterioration, putting any aspirations of a swift turnaround to rest.

"We expect Q2FY24, while seasonally strong, to remain weak sequentially, with quarter-on-quarter CC (constant currency) growth ranging from -1 percent (Tech Mahindra) to +1.9 percent (HCLTech) among the top-five firms," ICICI Securities says.

Despite the widely held belief that demand will increase in the second half of FY24, ICICI Securities anticipates it to remain subdued (save for HCL owing to product business and Verizon deal ramp-up) due to severe macroeconomic conditions and leaking base business countering significant deal ramp-ups.

With steady management, margins, and solid execution, the current quarter has played to the strengths of large-sized Indian IT enterprises. TCS, Infosys, and HCLTech have all announced significant transactions.

While the industry has seen an increase in order inflow over the last two months as a result of a focus on cost efficiency, the slowdown in project-based business is projected to stymie overall industry development, despite the fact that Q2 is normally a strong season for the sector.

Banking, financial services and insurance (BFSI), retail, information technology, and communication continue to exhibit signs of weakness in the face of rising prices and decreased consumer expenditure.