Divya Delhi:  The ICRA predicts a moderate 4-6% USD revenue growth for Indian IT services companies in FY26. Over the short future, ICRA expects attrition to stabilize around the long-term norm of 12-13%. The credit rating agency also predicted modest hiring until FY2026's growth momentum increases up. Operating profit margins (OPM) for the sample set should remain around 22.5-23% for three to four quarters. Deepak Jotwani, Vice President & Sector Head, ICRA, said, “The growth momentum for ICRA’s sample set of IT services companies is likely to remain muted over the near term, owing to the looming uncertainty related to the imposition of US trade tariffs and macroeconomic headwinds across the key markets of the US and Europe.” The firm reported 3.6% YoY USD sales growth in sample set 1 in 9M FY2025, indicating modest improvement over the preceding three quarters. A relatively lower base of FY2024, a minor rise in discretionary spending by BFSI and retail clients in several countries, and GenAI investments resulting in new order inflows aided the rebound. Attrition rates and salary cost inflation, which had been concerns for industry players in FY2023 and H1 FY2024, have eased, according to ICRA. The sample set of companies' LTM attrition dropped to 12.8% in Q3 FY2025 from 22.3% in Q3 FY2023, as growth slowed and hiring increased to meet the demand-supply mismatch. Over the near term, ICRA expects attrition to stabilize at 12-13%., Due to slower salary hikes, labor cost as a percentage of operating income (OI) fell to 56.2% in Q3 FY2025 from 57.0% in Q3 FY2024. In recent quarters, higher personnel utilization and cost structure optimization supported the sample set's OPM at 22.5-23%, which is predicted to continue until FY2026. A forecasts hiring to stay low until FY2026 growth accelerates. Higher industry GenAI investments and predicted productivity and cost reductions can potentially explain lower employment activity. Leading Indian IT services businesses have trained a large number of their staff in GenAI skills and are expanding their capabilities and service offerings to provide Gen AI-based solutions to clients. The firm claimed that despite near-term revenue headwinds and longer deal cycles, industry deal wins in recent quarters have remained resilient. It stated that industry participants have robust total contract value, which gives near-to-medium revenue visibility.