AI shines as Indian IT growth slows

India’s largest information technology companies entered fiscal year 2027 with a familiar challenge but a markedly different growth narrative. While clients continued to tighten discretionary technology spending amid macroeconomic uncertainty, artificial intelligence emerged as the biggest driver of enterprise investments. The June-quarter earnings from TCS, Infosys, HCLTech, Wipro, and Tech Mahindra suggest the country’s $280 billion IT services industry is moving into a new phase. AI is no longer viewed as a standalone technology but as the foundation of enterprise transformation.

Revenue growth remained uneven across the sector. Yet management commentary from all five companies pointed in the same direction: customers are increasingly shifting from AI pilots to production-scale deployments. This shift is reshaping deal conversations, service offerings, and leadership priorities across the board.

Related: Amazon CEO pledges $48B India investment expands commerce

Shift From Pilots to Production

The clearest indication of this transition came from Tata Consultancy Services. The company reported an annualized AI revenue run rate of $2.6 billion, alongside a $9.5 billion order book. Chief Executive Officer K Krithivasan noted that the company continues to see strong demand for AI, data, modernization, and cybersecurity. He stated that enterprise technology budgets are increasingly flowing toward integrated transformation programs rather than isolated digital initiatives.

Infosys echoed a similar trend. AI-led services now contribute 8.2% of the company’s revenue, highlighting how quickly generative AI has become a commercial business rather than an experimental capability. The company secured $3.6 billion in large deal wins during the quarter. However, it narrowed the upper end of its FY27 revenue growth guidance to 3% from 3.5%, reflecting continued caution in discretionary spending. Chief Executive Salil Parekh said the company continued to witness strong demand for AI capabilities across clients, even as enterprises remained selective about broader technology investments. The quarter also marked an important leadership transition, with Infosys naming company veteran Ashiss Kumar Dash as CEO-designate.

The current discrepancy between surging deal values and restrained growth forecasts indicates a market in flux. Organizations are clearly willing to sign contracts for future-ready infrastructure, but the immediate financial payoff is taking longer to materialize than in previous technology cycles. It appears the sector is absorbing the cost of these complex transitions before the benefits flow through to the bottom line.

Related: B-Schools Add AI Labs for Data-Savvy Managers

Deal Wins and Revenue Misses

If TCS demonstrated AI at scale, HCLTech highlighted how the technology is beginning to emerge as a measurable business in its own right. The company became the first among India’s major IT firms to separately disclose Advanced AI revenue. This figure reached $171 million during the quarter, growing more than 60% year-on-year. Supported by $2.4 billion in new bookings, Chief Executive C Vijayakumar said the numbers reflected growing enterprise confidence in AI-led transformation, particularly around agentic AI, AI engineering, and industry-specific solutions.

The story was similar at Wipro and Tech Mahindra, although expressed differently. Wipro reported $1.63 billion in large deal bookings despite muted revenue growth. Chief Executive Srini Pallia said customers are increasingly adopting AI-enabled operating models that improve resilience and productivity. Rather than pursuing standalone AI projects, enterprises are embedding AI into broader business transformation programs spanning operations, customer experience, and software engineering.

Tech Mahindra, meanwhile, emerged as the strongest sequential revenue performer among the five companies. It maintained quarterly deal wins above $1 billion for the third consecutive quarter. Chief Executive Mohit Joshi attributed the performance to the resilience of the business and the strength of client relationships, even as the company continued expanding its AI-led platform strategy.

Related: Weekly roundup New infosec products debut July 17

Workforce Trends Stabilize

Beyond AI, the quarter also reflected a more disciplined operating environment. Attrition continued to stabilize across the industry, ranging from 11.8% at Tech Mahindra to 13.9% at Wipro. These figures are significantly below the peaks seen during the post-pandemic hiring cycle. TCS remained the only company among the top five to add employees in meaningful numbers during the quarter. Peers maintained cautious hiring despite continuing investments in AI talent and specialized engineering skills.

Biswajit Maity, Senior Principal Analyst at Gartner, said that taken together, the June-quarter results point to an industry where the conversation has shifted decisively from digital transformation to AI transformation. Revenue growth may remain constrained by global economic uncertainty, but large deal pipelines, AI-specific revenue streams, and management commentary all suggest enterprise customers are moving beyond experimentation. For India’s IT majors, the question is no longer whether AI will become the next growth engine. The challenge is how quickly that demand translates into sustained revenue acceleration as enterprises scale AI across their businesses.