For the second year running, India’s IT industry body revised its revenue and growth number for the current fiscal as well as the past three years, projecting a three-year high revenue growth of 6.1% to $315 billion in FY26, higher than its earlier estimate of $300 billion, which it had projected in February last year.
Alongside, the National Association of Software and Service Companies (Nasscom) also said job additions are expected to be stagnant next fiscal year and beyond.
Speaking to the media after releasing the numbers at the Nasscom Technology and Leadership Forum, Sangeeta Gupta, senior vice-president and chief strategy officer of Nasscom, said the revision was done because the pool of companies that the industry body factors into its revenue guidance has grown. Plus, the new estimate includes several new global capability centres or GCCs and domestic AI firms that it could not track earlier.
“Because the sector is so large today, we will go and do a deep dive on sub sectors, which we can't do every year,” Gupta said, adding that last year too the GCC numbers were revised. “This year, we've looked at the domestic market as one of the big factors, and also corrected for that.”
IT services leading the way
At least a third of the incremental growth in FY26 will be fuelled by IT services companies, which make up almost half of the country’s tech sector, fetching $143 billion in revenue.
Engineering, research and design (ER&D), customer support firms, software product firms, and hardware firms accounted for $59 billion, $55 billion, $21 billion, and $19 billion, respectively.
Nasscom also restated its FY25, FY24, and FY23 tech sector revenue to $297.2 billion, $280.7 billion, and $267 billion, respectively, after accounting for more companies in its calculations.
Revenue vs jobs
The industry body expects growth at a similar pace to that of FY26 in coming years, which Gupta said would be around 5-6%.
However, headcount addition is expected to be muted. The IT industry added 133,000 employees in FY25, and is expected to add 135,000 in FY26 to end with 5.95 million employees. Nasscom said it expects headcount in FY27 and beyond to be around the same range.
The employment numbers come in the backdrop of concerns from advancements in artificial intelligence tools, especially after Anthropic announced new plug-ins to its flagship Claude AI tool on 30 January. The new additions automate legal, marketing, and software development related-tasks, which are core to India’s IT industry.
“Traditional IT services growth is under pressure as AI compresses labour demand, shrinks deal sizes, and shifts value toward platforms and IP,” said Phil Fersht, chief executive of HFS Research, a Massachusetts-based IT research and consulting firm.
“Unless firms fundamentally rewire around AI-led delivery, revenue per employee and margin per employee will remain constrained; 6% growth may steady sentiment, but it does not signal transformation. The winners will be those who use this slowdown to reinvent, not those who celebrate incremental recovery,” he added.
Big five estimates
Nasscom’s revenue optimism is in contrast to the mood of the country’s five largest IT services companies — Tata Consultancy Services Ltd, Infosys Ltd, HCL Technologies Ltd, Wipro Ltd, and Tech Mahindra Ltd. The big five made up almost a third of the sector last year, reporting $80 billion in revenue.
At the start of the year, four of these companies — barring Tech Mahindra — have factored in weaker FY26 growth compared with last year, underscoring weak demand visibility and fears of automation eating into their business.
At least three brokerages expect Mumbai-based TCS to end FY26 with a revenue decline, which would be its first since listing in 2004. The company would need to grow at its fastest fourth quarter (January-March 2026) in five years if it is to match last year’s revenue of $30.18 billion.
Second-largest Infosys has guided for 3-3.5% revenue growth in constant currency terms for FY26. It ended last year with a constant currency growth of 4.2%. Constant currency (CC) excludes the impact of exchange-rate movements.
Third-largest HCLTech, which grew 4.7% last year, has guided for 4-4.5% growth in constant currency terms this fiscal year. Infosys and HCLTech ended last year with $19.28 billion and $13.84 billion in revenue.
On the other hand, fourth-largest Wipro stares at another possible revenue decline. The Bengaluru-based tech outsourcer needs to report its fastest sequential fourth quarter growth of 1.86% to match last year’s revenue of $10.51 billion.
Wipro’s management has guided for fourth-quarter revenue of $2.64-2.69 billion, which implies a full-year revenue decline at the lower end of the range.
Macros under control
Nasscom’s management voiced concerns on the macroeconomic environment, but said there was a shift in tech spending.
“Despite a sort of a very cautious macro environment, we always saw the surge in tech spending was notable. The paradox was actually driven by the strategic shift where enterprises, quite honestly, prioritized resilience and productivity over, of course, completion and expansion,” said Rajesh Nambiar, president of Nasscom, in his opening address to the media.
For the first time, Nasscom also stated that it expects AI revenue at $10-12 billion in FY26. Nasscom executives clarified that AI revenue includes the revenue from AI-led services as shared by IT services companies and small AI-native firms.