New Delhi, April 23 -- India's IT earnings season closed on a modest note, with Infosys reporting a better-than-expected March quarter profit-rising about 28% sequentially to Rs.8,500 crore-while broadly echoing trends seen across peers: steady but measured growth, gradual movement in AI-led deal pipelines, and a continued focus on cost discipline. Alongside results from Tata Consultancy Services, HCLTech, Wipro and Tech Mahindra, the FY26 performance points to an industry that remains fundamentally stable, even as it gradually adjusts to AI-led shifts and more selective hiring.
Steady revenues, uneven growth
The March quarter numbers across the top five firms suggest a sector that has largely held its ground, though growth remains uneven and, in parts, subdued. Infosys's profit beat-driven by margin improvements and execution discipline-comes against a backdrop of cautious client spending, particularly on discretionary projects.
Tata Consultancy Services reported a 12% year-on-year rise in Q4 net profit, supported by a stable deal pipeline, even as demand visibility remains limited. HCLTech posted 12% revenue growth for the year, with modest profit expansion, while flagging pressure from client cutbacks.
Wipro continued to see a gradual stabilisation in performance, while Tech Mahindra reported 16% year-on-year profit growth in Q4, aided by select verticals such as BFSI and manufacturing. Overall, the divergence across firms underscores a familiar pattern-larger, diversified players have remained relatively steady, while others continue to recalibrate portfolios and execution.
AI moves ahead gradually in deal pipelines
A more structural shift is visible in how companies are positioning artificial intelligence within their growth strategies. Across all five firms, management commentary suggests that AI is moving beyond early-stage experimentation, though the pace of scaling remains measured.
At Infosys, CEO Salil Parekh said the firm is positioning itself as an "AI partner of choice" for clients, reflecting a gradual increase in AI-led engagements. Tata Consultancy Services has indicated that AI-integrated deals are beginning to see improved pricing, pointing to cautious but growing enterprise adoption. The company's AI revenue run rate has crossed $2.3 billion, suggesting early signs of monetisation.
At HCLTech, AI services revenue has expanded to over $600 million annually, even as the company flagged potential pressure on pricing from efficiency gains. For Tech Mahindra, CEO Mohit Joshi has pointed to deal wins of over $1 billion in Q4, indicating a gradual pick-up in large deal activity with AI components. Industry-wide, analysts suggest AI is becoming a more regular part of large contracts, often linked to productivity improvements, though the full revenue impact is still evolving.
Partnerships expand, but remain incremental
The shift towards AI-led transformation is also reflected in the continued expansion of partnerships with global technology providers such as Microsoft, Amazon Web Services and Google Cloud. Across companies, these alliances are increasingly being integrated into deal structures, combining cloud, data, and AI capabilities. However, much of this progress remains incremental rather than transformative in the near term.
Analysts at Gartner have noted that enterprise spending is gradually shifting towards platform-led ecosystems, where service providers play a broader integration role. For firms such as Infosys and Tata Consultancy Services, these partnerships are increasingly embedded within large deals, while Wipro and Tech Mahindra are using them to support ongoing repositioning efforts.
Hiring remains cautious as attrition eases
Workforce trends across the sector reflect a continued shift towards efficiency. After a period of aggressive hiring, companies are now more measured, with a focus on utilisation and reskilling.
Tata Consultancy Services added around 2,300 employees in Q4, taking its workforce past 600,000, while attrition edged up slightly to ~13.7%. HCLTech reported attrition at 12.5%, with limited hiring additions. Tech Mahindra reduced headcount during the quarter, reflecting a tighter approach to costs and automation.
Across the sector, attrition has eased into the 12-14% range, and hiring remains selective. As Salil Parekh noted in a recent interaction, AI-led changes are expected to reshape roles gradually rather than lead to immediate displacement.
Brokerages and consulting firms, including Gartner, have indicated that the sector is moving towards a more "skills-first" model, where headcount growth is likely to remain limited even as demand for specialised talent increases.
Taken together, the FY26 performance of Infosys and its peers suggests an industry that remains stable, though without a clear near-term trigger for stronger growth. With discretionary spending still constrained, the pace at which AI-led demand translates into sustained revenue growth will be a key factor shaping the sector's trajectory.
Published by HT Digital Content Services with permission from TechCircle.