Muted Recovery Ahead: India’s Top IT Firms Brace for Another Tough Year

India’s top five IT service giants—

, , , , and , are facing doubts over a meaningful rebound in FY26, after FY25 marked their weakest performance in recent years. Two companies reported revenue declines, and overall growth across the Big Five stayed below 4.5%, dragged down by a shortage of large deals, muted client spending, and global macro uncertainties. In the first half (H1) of FY26, Infosys and HCLTech showed moderate revenue growth, while TCS and Wipro saw declines, and Tech Mahindra reported flat numbers. Infosys grew 4.26% YoY, faster than last year, whereas HCLTech slowed to 5.58%, though it remains the fastest-growing among peers. TCS’s revenue fell 1.9%, Wipro’s by 1.78%, and Tech Mahindra’s growth was negligible at 0.06%, underscoring a broad industry slowdown. Headwinds and Market Reaction Hiring activity—a key demand indicator—has remained subdued, while share prices of all five firms have fallen 15–28% since January 2025. Visa restrictions in the US, tariff-related trade issues, and AI-driven pricing deflation are compounding the challenge. TCS would need to deliver a 2.4% sequential revenue jump in Q3FY26—the fastest in three years—to match last year’s total, a demanding target amid uncertain demand. Infosys expects a modest 3% revenue growth, HCLTech targets up to 5%, while Wipro and Tech Mahindra remain cautious despite pipeline improvements. Analysts at HSBC project an 8–10% revenue impact over the next 3–4 years due to AI adoption, which could compress outsourcing revenues in the short term before turning accretive long-term. Despite large deal wins, the second half of FY26 is expected to stay soft due to seasonal weakness, automation threats, and fragile global spending, suggesting the IT recovery may take longer than hoped.