Revenue growth for India’s leading IT companies is expected to remain muted in the current fiscal year, as benefits from artificial intelligence are offset by reduced client spending amid macroeconomic and geopolitical uncertainty.
The Nifty IT Index, the worst-performing sector in 2026, has lost around $26 billion in market value this week following disappointing earnings from Tata Consultancy Services and Infosys, Reuters news report said.
The U.S., which contributes more than half of revenues for major IT firms based in India, is witnessing softer deal pipelines amid uncertainty over immigration, tariffs, and global conflicts. The slowdown is most pronounced in the banking and financial services segment, a key revenue driver.
A recent report from Gartner indicates that the global IT services market is projected to grow 9 percent in 2026, reaching $1,870.197 billion, up from $1,715.650 billion in 2025. The IT services market in terms of spending had recorded a growth rate of 6.2 percent in 2025.
Tata Consultancy Services reported its first annual revenue decline in over two decades, while Infosys, HCLTech, and Wipro have trimmed their fiscal 2027 growth forecasts.
Although AI-driven revenue is expanding rapidly, it still accounts for less than 5 percent of total revenue and is pressuring pricing, particularly in legacy contracts.
Mid-sized firms such as LTIMindtree and Persistent Systems, with stronger digital and AI exposure, are expected to outperform.
Despite near-term challenges, analysts believe AI adoption will eventually help Indian IT firms protect margins and unlock new growth avenues. Meanwhile, the broader Nifty 50 is down 8.6 percent so far in 2026, highlighting wider market pressures.
Guidance
Analysts estimate that India’s top five IT firms will deliver revenue growth of only 3 percent to 4 percent in the near term. The $315 billion sector, employing about 5.9 million people, last recorded double-digit growth in the March 2023 quarter. Expectations that a weaker rupee would drive about 10 percent revenue growth have not materialized.
The Indian IT sector is currently facing a “guidance reset” as firms grapple with a transition from traditional outsourcing to AI-native engineering.
Infosys officially pegged its FY27 revenue growth at 1.5 percent to 3.5 percent in constant currency (CC). This is considered a conservative start to the year, reflecting cautious discretionary spending by global clients.
HCLTech provided a disappointing guidance of 1.0 percent to 4.0 percent CC growth for the full year. This is notably one of their lowest guidance ranges in several years, leading to a significant stock price correction following the announcement.
Wipro’s Q1 FY27 forecast is indeed muted, with management projecting revenue to be flat to -2.0 percent in constant currency.
While TCS does not provide formal quarterly guidance, they exited FY26 with strong momentum. Annualized AI revenue crossed $2.3 billion in Q4, and analyst consensus for FY27 growth sits in the high single digits (approx. 7–9 percent) based on a $12 billion TCV (Total Contract Value) win in the last quarter.
Persistent Systems remains on track for its $2 billion revenue target by FY27, supported by a consistent 3.2 percent QoQ growth rate in the final quarter of FY26.
Following the acquisition of Encora (finalized in April 2026), Coforge’s revenue is expected to cross the $2.5 billion mark in FY27, positioning it closer to the large-cap league.
L&T Technology Services (LTTS) is prioritizing margins over aggressive top-line growth. While large deal wins were up 40 percent, their FY27 CAGR target of 13–15 percent is viewed as ambitious by analysts given the current 0.3 percent QoQ growth rate.
Current performance
India’s leading IT services companies delivered mixed performance in Q4 FY26 and full-year FY26, reflecting cautious client spending, macro uncertainty, and rising investments in AI and digital transformation. While Tier-1 firms reported muted growth, mid-tier and engineering-focused companies continued to outperform.
Infosys reported Q4 FY26 revenue of ₹46,402 crore, rising 13.4 percent, supported by strong deal wins and digital services demand. Full-year revenue reached ₹178,650 crore, growing 9.6 percent.
Tata Consultancy Services (TCS) posted Q4 revenue of $7,621 million with 1.5 percent sequential growth, while full-year revenue stood at $30,017 million, declining 0.5 percent in reported terms. Despite the slight dip, TCS achieved a major milestone with annualized AI revenue exceeding $2.3 billion in Q4 and delivered its highest operating margin in four years at 25 percent, highlighting operational resilience.
HCLTech recorded Q4 revenue of ₹33,981 crore, up 12.3 percent, and full-year revenue of ₹130,144 crore, growing 11.2 percent. The company achieved record annual revenue, though margins were impacted by higher employee and outsourcing costs, reflecting ongoing investment in talent and delivery capabilities.
Wipro reported Q4 revenue of $2,657 million, declining 0.3 percent sequentially, with full-year revenue of $10,812 million, down 1.2 percent (estimated). The company continued to face weak discretionary spending, particularly in consulting-led projects.
Tech Mahindra posted Q4 revenue of $1,614 million with 1.6 percent sequential growth, while full-year revenue reached $6,385 million, rising 1.9 percent YoY. Growth remained modest, reflecting challenges in telecom vertical demand, though enterprise business showed gradual recovery.
LTIMindtree delivered Q4 revenue of ₹11,291.7 crore, up 15.55 percent YoY, and full-year revenue of ₹42,307.6 crore, growing 11.31 percent YoY. The company reported over 23 percent growth in net profit, driven by its Fit4Future efficiency program and improved execution.
Persistent Systems continued its strong momentum with Q4 revenue of ₹4,055.9 crore, up 25.10 percent YoY. Full-year revenue reached ₹15,320 crore, with 16.2 percent growth in USD terms. The company maintained a strong deal pipeline, with Q4 TCV at $600.8 million, supported by AI and cloud transformation demand.
L&T Technology Services reported Q4 revenue of ₹2,857.9 crore, up 8.34 percent YoY, while full-year revenue stood at ₹11,150 crore (estimated), growing 9.5 percent. The company focused on margin expansion, achieving a record operating margin of 18.24 percent in Q4.
Several mid-tier IT firms are yet to report official FY26 results:
Coforge is expected to post Q4 revenue of $330–$345 million, with 15–18 percent constant currency growth. Results are scheduled for April 28, 2026.
Mphasis is set to announce results on April 30, 2026.
Hexaware Technologies is expected to report Q4 revenue of ₹3,180–₹3,250 crore, with its board meeting scheduled on April 30, 2026.
RAJANI BABURAJAN
