India's Top IT Firms Navigate AI-Driven Changes Amid Mixed Results for FY26
Indian IT faces AI reset as top 5 firms post mixed FY26
The Economic TimesImage: The Economic Times
India's leading IT companies, including TCS, Infosys, HCLTech, Wipro, and Tech Mahindra, reported mixed financial results for FY26, influenced by macroeconomic challenges and the impact of Artificial Intelligence (AI). While traditional IT services face revenue deflation, new AI-driven engagements are expected to create significant opportunities, with projections of an additional USD 300-400 billion market by 2030.
- 01India's top IT firms are adapting to an AI-driven landscape, leading to a shift from traditional services.
- 02TCS reported a 12.22% profit increase for Q4 FY26, while Infosys saw a 20.8% rise in net profit.
- 03HCLTech and Wipro indicated ongoing volatility and cautious spending, affecting their growth outlook.
- 04AI is expected to cause a 2-3% annual revenue deflation in traditional IT services.
- 05The overall AI market for Indian IT services could reach USD 300-400 billion by 2030.
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India's top five IT companies—Tata Consultancy Services (TCS), Infosys, HCLTech, Wipro, and Tech Mahindra—are facing a significant transformation as they adapt to the challenges posed by macroeconomic conditions and the rising influence of Artificial Intelligence (AI). For the fiscal year 2025-26 (FY26), TCS reported a 12.22% increase in net profit, reaching ₹13,718 crore (approximately $1.65 billion USD), with revenues from operations climbing 9.64% to ₹70,698 crore (around $8.5 billion USD). Infosys also performed well, with a 20.8% rise in net profit to ₹8,501 crore and a 9.6% revenue increase to ₹178,650 crore. However, HCLTech and Wipro expressed concerns over continued volatility and soft discretionary spending, with HCLTech's net profit declining 4.3% for the year. Both companies acknowledged that AI is contributing to a 2-3% annual deflation in revenues from traditional IT services but are optimistic about new AI-driven opportunities. The overall market for AI in Indian IT services is projected to grow by USD 300-400 billion by 2030, indicating a significant shift in client priorities towards AI-native engagements. Tech Mahindra also reported growth, with a 16% increase in net profit for Q4 FY26 and a 7.2% rise in annual revenue. As the industry navigates these changes, executives emphasize the importance of positioning for long-term value creation through AI.
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The shift towards AI is reshaping the Indian IT landscape, potentially leading to job reallocation and new opportunities in AI-driven services.
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