Mumbai: After three years of muted revenue growth, the IT industry in India is expected to rebound in 2026, according to a report by HDFC Securities. After reports of mass layoffs due to redundant roles following continued AI-driven automation, India’s IT industry is expected to grow by 7.7% in FY27, going by the deals signed by major IT companies.
Over the past six quarters, almost 74% of the deals closed by leading IT companies have been AI related, including generative, agentic and automation services aimed at cutting costs and improving productivity. HCL Tech has been the frontrunner here, securing 139 AI-focused out of the 194 signed during the year, almost 72% of the total. India’s largest IT company TCS also saw an even higher proportion of AI-led deals, with 81 of its 106 deals focused at AI-enhanced transformations.
Indian IT companies are now seeing a broad, industry-wide pickup in deals won, where enterprise IT spend is done across verticals including BFSI, retail, hi-tech, healthcare and manufacturing. Clients expect better capabilities to drive cost efficiency, while automating operations through AI-led interventions.
“We expect growth to recover to 7.7% in FY27E vs average growth of ~3% for the last three years. This recovery manifests a transformational industry phase where Al is at the core of deal wins and enterprise investments, catalysing an uptrend in revenue growth and market optimism,” the report stated.
AI has rapidly moved from a niche to a mainstreamed component of IT services, where AI-led solutions offer assistance on key recurring tasks saving time and effort. For Indian IT companies, this has meant making the shift from legacy software to integrating AI in every sphere of its solutions. Though the number of deals may look good on paper, the real test would be to train, find and retain the talent needed to work on these projects, even as specialised talent remains scarce and developing the requisite skills takes a lot of time. The growth in the industry hinges on such skilled manpower, and how the IT companies deal with the challenge remains to be seen.
<p>The post India’s IT industry to recover in 2026? AI-focused deals could hold the key: HDFC Securities Report first appeared on Hello Entrepreneurs.</p>
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