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AI's Dual Role: Driving Down Old Business, Building New Opportunities
India's major IT companies are navigating a significant industry shift driven by Artificial Intelligence. AI is proving to be a double-edged sword: it's causing revenue to shrink in traditional, labor-intensive IT services, while simultaneously opening up large new income streams from AI-native projects. Clients are changing how they buy IT services, focusing more on specific results rather than just overall project size.
FY26 Earnings: A Clear Divide Among Top IT Firms
The financial results for the top five companies showed a clear split. Tata Consultancy Services (TCS) announced a strong 12.22% increase in net profit for the March quarter and a 1.35% rise for the full year, reaching ₹49,210 crore. Infosys also saw growth, with a 20.8% jump in Q4 net profit and a 10.20% increase for the fiscal year, totaling ₹29,440 crore. Both TCS and Infosys indicated that the toughest economic challenges might be easing. However, HCL Technologies reported a 4.30% dip in full-year profit, despite an 11.18% revenue increase. Wipro's net profit grew only slightly by 0.47% for the fiscal year. Tech Mahindra, meanwhile, reported a 16% rise in Q4 profit and a 13.15% increase for the full year.