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Informist, Thursday, Jul. 16, 2026

NEW DELHI – Aggregate revenue of top Indian information technology services companies is set to grow only 1-3% in 2026-27 (Apr-Mar), according to a report by Crisil Ratings released Thursday. The outlook is dim for the next financial year as well, given the artificial intelligence-driven disruptions, weak discretionary spending of clients, and continuing geopolitical uncertainties, the report said.

The report is based on an analysis of India's top 26 IT services companies, which together accounted for about 55% of the industry's estimated revenue of INR 16 trillion last fiscal, Crisil Ratings said. Tier-1 companies with revenues above INR 400 billion contribute nearly 85% to this sample set and mid-tier firms account for the remainder.

"Rising adoption of AI-native solutions is intensifying pricing pressure, triggering deal renegotiations and slowing execution as clients reassess technology spending. At the same time, weak discretionary spending and uncertainty in the US and Europe continue to weigh on demand. This will keep revenue visibility modest over the near term," Senior Director Anuj Sethi was quoted as saying in the report.

While a 5-7% depreciation of the rupee would support revenue growth and operating profitability in the ongoing financial year, this support factor is likely to fade next year, the report said. 

Crisil Ratings expects the net headcount addition in the sector to remain subdued this financial year as well as in the next as companies focus on defending margins and improving productivity. Automation, higher employee utilisation, and selective hiring for AI-related skills will remain the key levers, it said.

"Prudent resource management and currency tailwinds should help the sector sustain healthy operating margins of 22-23% this fiscal. But that cushion could narrow from next fiscal as revenue pressures persist, talent costs rise, AI investments continue and forex support moderates," Crisil Ratings Director Aditya Jhaver said.

Having said that, strong balance sheets and healthy cash generation will continue to support investments in technology upgrades and selective acquisitions, particularly in AI, cloud, cybersecurity, and digital engineering, as per the report. Reliance on debt is expected to remain limited given robust liquidity and sizeable cash reserves, thereby supporting stable credit profiles, Crisisl Ratings said.

According to the report, over the next two years, business risk profiles of companies in the sector will be determined by ability of companies to scale their AI-led engagements, protect margins, and navigate rising competition from global capability centres while managing the growing demand for AI-skilled talent.

MID-TIER PLAYERS

Mid-tier IT firms have outperformed their larger peers with double-digit growth over the last few years. However, the overall subdued industry outlook is expected to temper momentum and moderate growth of these companies to high single-digits in the ongoing financial year and the next, the report said.

Overall, mid-tier IT companies could prove to be nimble in this environment, Crisil Ratings said, adding that for the broader industry, the key test will be how quickly companies reinvent business models, adapt effectively to the changing industry landscape, and expand into newer services.  End

Reported by Shakshi Jain

Edited by Avishek Dutta

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