The fourth quarter earnings for the Indian IT sector, particularly for fiscal year 2026, are projected to be subdued due to various global uncertainties, including the US-Iran war and disruptions from generative AI. Tata Consultancy Services (TCS) is expected to lead Tier-1 companies with a 1.2% sequential revenue growth in constant currency terms. In contrast, Infosys may experience a 0.8% decline in revenue, while HCL Technologies is likely to see a 1.6% contraction. Tier-2 companies such as Persistent Systems are anticipated to outperform their larger counterparts, with expected growth of 4.0%. The depreciation of the Indian rupee against the US dollar is expected to support earnings and maintain margins across the sector, with Kotak Institutional Equities predicting a 40-320 basis points year-on-year increase in EBIT margins for the top six IT firms. Despite the challenges, Nuvama Equities remains optimistic about the IT sector, maintaining a 'Buy' rating on all top ten IT services companies, including TCS and Coforge.