TLDR: The first half of FY26 saw Indian IT companies like Wipro, Infosys, and TCS secure significant large deals, primarily driven by vendor consolidation, cost optimization, and AI integration. Despite robust deal bookings, the sector anticipates slower revenue growth for FY26 due to global macroeconomic uncertainties, with an AI-powered rebound projected for FY27.
Indian IT service giants have demonstrated remarkable resilience in the first half of Fiscal Year 2026, securing a substantial volume of large deals despite a prevailing subdued demand environment. This trend, characterized by a focus on vendor consolidation, cost optimization, and AI-powered transformations, signals a strategic shift within the industry.
Wipro, a leading IT major, reported total bookings of $4.68 billion in the September-ended quarter. Its large deal Total Contract Value (TCV) surged by 90.5 percent year-on-year in constant currency to $2.85 billion. Wipro’s CEO and MD, Srini Pallia, highlighted that the company signed 13 large deals, including two mega-deals in healthcare and BFSI sectors. He noted that while many of these are renewals, they are crucial for expanding market presence and fostering future growth. According to PL Capital, Wipro’s large deal TCV for H1 FY26 has already reached $5.5 billion, surpassing the full-year FY25 total of $5.4 billion. However, the concentration of these deals in vendor consolidation and cost optimization suggests longer tenures and potentially thinner margins.
Infosys also showcased strong large deal activity, with a TCV of $3.1 billion, of which 67 percent were net new deals. The company secured 23 large deals, including a significant £1.5 billion contract with the UK’s NHS. Deal bookings for Infosys were up 29 percent year-on-year, though revenue conversion remains slow.
TCS reported robust order inflows, with a TCV of $10 billion in the quarter, an increase from $9.4 billion in Q1. HCLTech also contributed to the positive deal momentum, recording a new deal TCV of $2.5 billion, marking a 41.8 percent sequential increase and 15.8 percent year-on-year growth, driven by cost optimization and digital transformation engagements.
Despite these strong deal bookings, the overall outlook for the Indian IT sector in FY26 points towards a slower pace of revenue growth, with industry guidance ranging from 1-5 percent. This cautious forecast is attributed to global macroeconomic uncertainty, geopolitical tensions, supply chain challenges, and clients prioritizing cost optimization, leading to project delays and deferrals. The NSE IT index has underperformed broader Indian market benchmarks, reflecting investor caution.
Also Read:
- Artificial Intelligence Shapes Varied Q2 Outcomes for Indian IT Sector Amidst Macroeconomic Headwinds
- India’s Data Center Surge: Three Niche Stocks Poised for AI and Cloud Growth
However, industry analysis, particularly from HSBC Global Research, identifies Artificial Intelligence (AI) as the pivotal driver for the next growth cycle. While current AI projects primarily focus on productivity improvements, there is a clear shift towards leveraging AI for business growth. Enterprise-scale AI adoption is anticipated to accelerate in FY27, presenting a significant opportunity for Indian IT providers to deliver transformative projects and managed services. Accenture, for instance, nearly doubled its Gen AI bookings to $5.9 billion in FY25 (September-August). A modest recovery is expected in FY27, with macroeconomic conditions stabilizing in the US and Europe, potentially leading to a 200–300 basis points improvement in revenue growth for Indian IT services companies due to increased demand for digital transformation and AI-led projects.
