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Introduction
In this Insight, ARC Advisory Group includes the most recent quarterly results for major Indian IT suppliers that publicly report their results. Financial results are during calendar period from April 1 to June 30.
The Indian IT sector entered FY26 with subdued momentum, shaped by persistent global macroeconomic challenges, tariff concerns, and geopolitical uncertainty.
- Despite seasonal catalysts, enterprise tech spending remained cautious, especially in discretionary and engineering R&D (ER&D) segments.
- Top-tier firms like TCS, Infosys, HCLTech, Wipro, and Tech Mahindra faced mixed revenue performance, with constant currency growth ranging from slight declines to modest gains.
- The industry is undergoing a strategic pivot toward AI, automation, and cost optimization, while managing margin pressures and recalibrating hiring strategies.
- Overall, Q2 FY25 set the tone for a year of resilience and recalibration, rather than aggressive expansion.
Executive Summary
Growth remains muted due to global macroeconomic uncertainty and cautious client spending. Indian IT & Services industry recorded combined quarterly revenue of $24 billion and recorded
2.6 percent year-over-year (YoY) growth as compared to last year.
- Top IT firms like TCS, Infosys, HCLTech, Wipro, and Tech Mahindra reported mixed performance:
- TCS led in deal wins and margins.
- Infosys and HCLTech saw modest revenue growth but margin pressure.
- Wipro surprised with strong profit growth.
- Tech Mahindra continued to face operational challenges.
- Deal pipeline stayed strong, but conversion delays impacted revenue realization.
- Hiring slowed, with selective additions and focus on upskilling for AI and cloud roles.
- Margins contracted slightly due to wage hikes and delayed project ramp-ups.
- Key verticals like BFSI, manufacturing, and retail showed resilience.
- Companies are pivoting toward AI, automation, and cost optimization to stay competitive.
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