Motilal Oswal's Q3 IT Preview: Furloughs to Impact Growth, AI to Drive Future

• Motilal Oswal's top IT picks for Q3 are Infosys, Tech Mahindra, Coforge, and Hexaware Tech.
• Seasonal furloughs are expected to weigh on Q3 growth, with markets focusing on CY26 demand signals.
• Demand is projected to remain steady or marginally incremental until January 2026 due to cautious client spending.
• Large cap IT firms may see 0.3-2.3% CC growth, while midcaps could range from -2.5% to 3.5%.
• CY26 is seen as the growth cycle bottom, with AI services driving significant acceleration from H2 FY27/FY28.

Why It Matters: Q3 IT growth to be muted by furloughs; AI and CY26 budgeting are key future drivers.