Key Points
IT sector growth supported by currency depreciation benefits
BFSI and retail segments show marginal recovery
AI adoption reshaping traditional IT service offerings
Hiring to remain cautious with focus on employee utilization
The revenue growth will also be supported by currency depreciation benefits of 2 per cent, according to the Crisil Ratings report.
This will be the third consecutive fiscal of mid-single-digit growth for the Indian IT services sector. Nevertheless, operating profitability remains healthy, led by modest employee addition amid low attrition.
Nearly, two-third of these revenues are contributed by banking, financial services, and insurance (BFSI; revenue share of 30 per cent), retail (15 per cent), manufacturing (10 per cent) and healthcare (10 per cent) while technology and services, communications and media form the bulk of remaining.
In fiscal 2025, revenue from the BFSI and retail segments made marginal recovery, growing 2 per cent (on constant currency terms), while manufacturing and healthcare growth remained sluggish at 3-4 per cent amid macro challenges.
Anuj Sethi, Senior Director, Crisil Ratings, said that "IT spends will remain focused on efficiency gains, consolidation and optimising costs, in the near term."
Notwithstanding, IT services companies will continue to see healthy deal wins with increasing focus on artificial intelligence (AI) and generative AI (Gen AI) aspects across all segments.
While AI adoption is still evolving, players are now bundling AI-based offerings with their traditional services making it more efficient for the end users.
According to Aditya Jhaver, Director, Crisil Ratings, "We expect domestic IT services providers to remain cautious on fresh hiring in fiscal 2026 and maintain focus on employee utilisation, estimated at 85 per cent."
That said, players will continue to eye acquisitions, especially small and mid-sized opportunities that could enhance their product baskets and digital capabilities.
The Crisil Ratings study looked at top 24 Indian IT services providers, accounting for 55 per cent of the estimated industry revenue of Rs 15 lakh crore this fiscal.
