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Indian IT Expects Another Year of ‘Foot-Dragging’ on Deals
- India’s top IT firms are facing prolonged deal delays and slower ramp-ups due to tight budgets and deferred transformation projects by global clients.
- Despite no major project cancellations, executives from TCS, Infosys, Wipro, HCLTech, and others foresee recovery possibly by late FY26.
- Tariff uncertainties and spending scrutiny have made deal-making cautious with a shift in growth trajectories from acceleration to protection.
- Companies like TCS and Infosys are seeing delays in new initiatives approvals, with a focus on mining existing accounts for stability.
- Wipro highlighted paused transformation programs due to client-side uncertainty, while HCLTech is banking on AI-led transformation for growth.
- Tech Mahindra faced revenue dip due to delayed renewal decisions, and smaller firms like Sonata Software and WNS also saw delays in closures.
- Amid client indecisiveness and foot-dragging, Indian IT firms are navigating a period of low to mid-single-digit growth in FY26.
- Clients are prioritizing cost reduction and assessing risks before focusing on digital transformation and AI, leading to cautious revenue outlooks.
- Budgets have been put on hold rather than vanishing, indicating a delay in tech spend decisions while clients seek cost efficiency.
- Indian IT firms are expected to continue facing challenges in deal closures and growth as clients take longer to make decisions in FY26.
- The demand for digital transformation still exists, but the emphasis has shifted towards cost efficiency and business continuity for Indian IT.
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