The Indian IT sector is preparing for a rebound in FY26, primarily driven by investments in artificial intelligence and digital transformation from major companies.
TCS and Infosys Lead AI-Driven Growth for FY26
The optimism within the Indian IT industry for FY26 follows muted Q4 results. Companies like TCS and Infosys are investing in AI and digital transformation to stimulate new growth. C Vijaykumar, CEO of HCL Technologies, highlighted the shift from linear growth models due to AI adoption and changing client needs.
quote: "Over the past 30 years, the industry has grown in a linear fashion—both in revenue and workforce size—but this traditional model is now poised for disruption." - C Vijaykumar, CEO, HCL Technologies.
Job Market to See 10-12% Growth in Indian IT
The anticipated 10–12% hiring increase contrasts sharply with the job cuts in FY24, indicating a recovering market. AI investments are expected to enhance resilience and competitiveness. Financial analysts predict a rebound with an estimated 500,000 to 750,000 new roles in FY25, instilling market confidence in AI and digital transformation investments.
AI and Digital Focus Drive Post-2008 Style Recovery
Following patterns seen in post-2008 and FY21, IT sectors are responding to global shocks with cautious strategies. The recent BFSI sector recovery offers a template for broader IT industry optimism.
quote: "Although there were signs of revival in FY25—particularly with BFSI recovering, leading to optimism across adjacent sectors like retail and manufacturing—the unexpected events have disrupted this momentum, as there is lack of clarity surrounding it." - Gaurav Parab, Principal Research Analyst, NelsonHall.
Therefore, despite ongoing global uncertainties, integrating AI and digital technologies into the investment strategy of the Indian IT sector could pave the way for job creation and enhanced sector resilience.
