New Delhi, April 23 -- India's IT earnings season closed on a measured note, with Infosys reporting a better-than-expected March quarter profit-rising about 28% sequentially to Rs.8,500 crore-and echoing trends already visible across peers: steady growth, improving deal pipelines in AI and digital, 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 stable on fundamentals, even as it gradually pivots towards AI-led growth and more selective hiring.
Steady revenues, selective outperformance
The March quarter numbers across the top five firms underline a sector that has held its ground, even if growth remains uneven. Infosys's profit beat-driven by margin improvements and execution discipline-comes amid a backdrop of cautious client spending, particularly on discretionary projects.
Tata Consultancy Services reported a 12% year-on-year rise in Q4 net profit, with a strong order book of about $12 billion, reflecting continued deal momentum. HCLTech posted 12% revenue growth for the year and modest profit expansion, even as it flagged pressure from client cutbacks.
Wipro remained in a stabilisation phase, while Tech Mahindra reported 16% year-on-year profit growth in Q4, supported by sectoral demand in BFSI and manufacturing.
The divergence highlights a familiar pattern-large, diversified players continue to outperform, while others are still recalibrating portfolios and execution.
AI shifts from pilots to core deal driver
A more structural shift is visible in how companies are positioning artificial intelligence within their growth strategies. Across all five firms, management commentary points to AI moving beyond experimentation into the centre of large transformation deals.
At Infosys, CEO Salil Parekh said the firm is becoming an "AI partner of choice" for large clients, pointing to a stronger outlook driven by AI-led engagements.
Tata Consultancy Services has similarly indicated that AI-integrated deals are commanding higher pricing, suggesting growing enterprise confidence in scaled deployments. The company's AI revenue run rate has already crossed $2.3 billion, underscoring early monetisation at scale.
At HCLTech, AI services revenue has expanded to over $600 million annually, even as the company flagged potential pricing pressure from AI-led efficiencies.
For Tech Mahindra, CEO Mohit Joshi has highlighted deal wins of over $1 billion in Q4, signalling improving traction in AI-led transformation deals.
Industry-wide, analysts say AI is no longer a side conversation but central to large contracts, often linked directly to productivity gains and cost optimisation.
Hyperscaler partnerships deepen
The shift towards AI-led transformation is closely linked to the deepening of partnerships with global technology providers such as Microsoft, Amazon Web Services and Google Cloud.
Across companies, these alliances are increasingly shaping large deal structures-combining cloud migration, data modernisation and generative AI into integrated offerings.
Analysts at Gartner have consistently pointed out that enterprise tech spending is shifting towards platform-led ecosystems, where service providers act as integration and innovation partners rather than standalone vendors.
For firms like Infosys and Tata Consultancy Services, scale has enabled deeper embedding within hyperscaler ecosystems, while Wipro and Tech Mahindra are leveraging partnerships to accelerate repositioning efforts.
Hiring slows as attrition stabilises
Workforce trends across the sector reflect a pivot from expansion to efficiency. After two years of aggressive hiring, companies are now more measured, focusing on utilisation and capability building.
Tata Consultancy Services added around 2,300 employees in Q4, taking its workforce past 600,000, while attrition edged up to ~13.7%. HCLTech reported attrition at ~12.5%, with modest hiring.
Tech Mahindra reduced headcount during the quarter, reflecting a sharper focus on efficiency 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 change will reshape roles but "not.overnight replace" jobs, signalling a gradual transition rather than disruption.
Brokerages and consulting firms, including Gartner and equities research houses, have flagged that the sector is moving towards a "skills-first" model, where headcount growth is likely to remain muted even as demand for specialised AI and cloud talent rises.
Taken together, the FY26 performance of Infosys and its peers suggests an industry that is stable but still searching for its next growth trigger. With discretionary spending yet to fully recover, AI-led transformation-and the ability to execute large, complex deals-will likely define how India's IT majors navigate the year ahead.
Published by HT Digital Content Services with permission from TechCircle.