New Delhi, July 2 -- India's IT sector is likely to report a subdued first quarter of FY27 (1QFY27), which could result in muted sequential revenue growth across the sector, as the weak demand environment is expected to persist into the second quarter of FY27 (2QFY27), according to a report by Motilal Oswal.

The report noted that macroeconomic uncertainty, AI-led disruption and geopolitical overhangs have continued to weigh on discretionary technology spending and decision-making cycles, resulting in a soft demand environment.

Apart from this, the first half of FY27 is tracking below the pace required to achieve the upper end of companies' full-year guidance; hence, "the ask on 2H to bridge the gap becomes increasingly impractical."

Th...