India’s top five IT services firms, Tata Consultancy Services, Infosys, HCLTech, Wipro and Tech Mahindra, ended FY26 at a turning point, with artificial intelligence driving a structural reset amid global macroeconomic pressures and geopolitical risks.
Earnings show a sector moving away from traditional effort-based models, as AI-led productivity gains begin to compress revenues in legacy services. However, this near-term deflation is being offset by rising demand for AI-native deals, pushing firms towards outcome-based and modular contracts.
A report by ICICI Direct estimates that AI could lead to a 2–3 per cent annual deflation in traditional IT services revenues over the next few years, while opening up a USD 300–400 billion market opportunity by 2030.
Among the firms, TCS reported a 12.22 per cent rise in March quarter profit to Rs 13,718 crore, with revenue growing 9.64 per cent to Rs 70,698 crore. For FY26, profit rose marginally by 1.35 per cent to Rs 49,210 crore, while revenue increased 4.58 per cent to Rs 2.67 lakh crore. The company said it is entering FY27 with “positive momentum”, noting that most recent headwinds are easing. Its AI services revenue crossed USD 2.3 billion, accounting for over 6 per cent of total revenue.
Infosys posted a stronger performance, with a 20.8 per cent jump in quarterly profit to Rs 8,501 crore and revenue rising 13.4 per cent to Rs 46,402 crore. For the full year, profit grew 10.2 per cent to Rs 29,440 crore, while revenue rose 9.6 per cent. CEO Salil Parekh said AI-led growth and improving global conditions could support recovery despite earlier disruptions.
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HCLTech reported a 4.2 per cent rise in quarterly profit to Rs 4,488 crore, but full-year profit declined 4.3 per cent to Rs 16,642 crore, even as revenue climbed over 11 per cent. The company flagged a volatile demand environment and guided for modest FY27 growth of 1–4 per cent in constant currency. Its AI revenues, however, showed traction, crossing USD 620 million annually.
Wipro’s performance remained subdued, with quarterly profit slipping 1.89 per cent to Rs 3,501.8 crore, though revenue grew 7.6 per cent. The firm described the current macroeconomic conditions as a “new normal” marked by geopolitical and policy disruptions, and announced a Rs 15,000 crore share buyback.
Tech Mahindra reported a 16 per cent rise in quarterly profit to Rs 1,353.8 crore and a 12.6 per cent increase in revenue. For the full year, profit rose 13.15 per cent. The company maintained that AI presents a significant long-term opportunity despite near-term disruptions.
Across the sector, executives acknowledged that AI is reshaping delivery models, reducing reliance on human hours while expanding demand for advanced digital services. The shift is also influencing hiring trends, with firms becoming more cautious even as they invest in new capabilities.
With global uncertainties, including tensions in West Asia, continuing to impact client spending and decision-making, the Indian IT industry appears to be navigating a complex transition, balancing short-term pressures with long-term AI-driven growth opportunities.
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