Indian IT companies head into the September quarter earnings season with modest expectations, as AI-led pricing pressure threatens to cap revenue growth.

TCS kicks off the results season on October 8. Analysts at Kotak expect steady deal wins but warn that AI-driven deflation, where clients demand more output at lower prices, could limit upside.

The brokerage said large deals continue to flow, but decision cycles remain long as global clients stay cautious on discretionary technology spending.

Margins are expected to stay stable, helped by operating efficiencies and a favourable currency. However, wage hikes and investments in AI capabilities could offset some gains.

Management commentary on client budgets, the pace of AI adoption and the outlook for the December quarter will be closely watched.

Investors will also track hiring trends and attrition, which signal how confident the industry is about demand recovery in the second half of the financial year.

Brokerages say management commentary on large deal renewals will be the clearest read on whether client budgets are finally loosening.