The latest quarterly results from TCS, Infosys, and HCLTech — three of India’s top IT services companies— show more than just their performance. They reveal how enterprise tech demand is shifting and what CIOs should prepare for. The key message? Companies are no longer spending on tech just to increase volume. Now, the focus is on real value, better efficiency, and accountability. (See: HCLTech bets on AI infrastructure as enterprises scale transformation)
Enterprise spending is still happening, but companies are being more careful. Infosys increased its FY26 guidance to 3.0% to 3.5% and reported $4.8 billion in major deal wins, showing that decisions are being made but with more caution. TCS grew revenue by 4.87% year over year to Rs. 67,087 crore, highlighting that core IT remains a priority. HCLTech saw 13.3% year-over-year revenue growth to Rs 33,872 crore and $3,006 million in new deals, highlighting that budgets are being allocated to engineering changes, platforms, and longer, measurable commitments.
Demand remains steady, but the rules have changed
Infosys raised its FY26 guidance, suggesting deals are moving faster and that projects that were paused are back on track. TCS kept revenue humming along nicely at 4.87% YoY growth, reminding us that basic IT support is still a must, even when the economy feels shaky. HCLTech grew stronger than expected, with 13.3% YoY revenue growth, thanks to a push into engineering, platforms, and big-picture changes rather than flashy one-off digital ideas.
Budgets are available, but they are only being spent on projects that clearly benefit the business, not on risky experiments.
Service providers are absorbing the costs, which gives buyers more leverage
All three companies saw profits decline due to compliance and fixed costs, not because clients reduced spending. TCS’s profit after tax fell 13.92% year over year to Rs 10,657 crore, partly because of Rs. 4,480 crore in exceptional charges. Notably, there were no major price increases or additional costs passed on to customers. They continue to invest in AI and automation to stay competitive.
This situation puts outsourcing partners at a disadvantage, allowing enterprises to negotiate better deals focused on productivity, automation, and results-based pricing. Currently, buyers have the advantage.
AI is now expected, not just a bonus
AI came up a lot in their discussions, but in a grounded way. AI was mentioned frequently in their earning calls, but in a practical way. They are including it in regular contracts to improve speed and reduce costs, rather than offering it as an extra feature. The key questions for businesses are: Where exactly are those productivity boosts showing up? How do they turn into real ROI? And who gets to keep most of the savings, the service provider or your team?
Deals are becoming more innovative and flexible
These results show a subtle shift. The industry is moving away from large, ongoing transformation projects toward more focused projects with clear milestones. There is also a greater emphasis on managed services and platforms. HCLTech’s $3,006 million in new deal wins, up 43.5% year over year, highlights this preference for structured, measurable work.
Enterprises should review a few key areas:
- How much do you rely on a single provider?
- Do your contracts offer flexibility and easy exit options?
- Are you locked into platforms, or are you prepared for collaborative innovation?
Talent has become a key topic in boardroom discussions
Looking deeper into the numbers, talent strategies are changing quickly: hiring is slowing, reskilling is increasing, and AI tools are being used to fill gaps.
For enterprises, this means smaller but highly skilled teams managing your work, increased risk if key people leave, and service providers competing based on talent quality instead of team size. Focus on their excellent skills, industry know-how, and their readiness for AI.
What should IT leaders do now?
Based on these earnings, here is a simple plan:
- Update your RFPs to require clear outcomes, evidence of productivity, and shared value.
- Request full details on how AI savings are calculated and shared.
- Strengthen relationships with a few key partners instead of working with many at once.
- Prepare for flat IT budgets while business expectations remain high.
- Align your IT plans directly with business goals, rather than following the latest technology trends.
The Bottom Line
These leading Indian service providers show that IT services are now about delivering results, not just expanding. They are adapting by absorbing costs and fully embracing AI. CIOs who increase oversight, focus on real outcomes, and choose partners carefully will gain a significant advantage.