Synopsis
The Indian IT services sector is forecasted to achieve a growth of 6-8% in fiscal 2026 despite macroeconomic challenges and uncertainties in crucial markets like the US and Europe, as per Crisil Ratings.Key Takeaways
- Indian IT services projected to grow 6-8% in fiscal 2026.
- Continuous macroeconomic headwinds from the US and Europe.
- Revenue growth aided by currency depreciation benefits.
- Strong performance in BFSI, retail, and healthcare sectors.
- Focus on AI and generative AI integration in services.
New Delhi, March 27 (NationPress) The Indian information technology (IT) services industry is anticipated to maintain a growth rate of 6-8 percent (in rupee terms) in fiscal 2026, despite ongoing macroeconomic challenges and rising uncertainties in major markets such as the US and Europe, according to a report released on Thursday.
This revenue growth is expected to be further supported by currency depreciation advantages of 2 percent, as highlighted in the Crisil Ratings report.
This marks the third consecutive fiscal year of mid-single-digit growth for the Indian IT services sector. Nevertheless, operating profitability remains strong, attributed to modest employee additions and low attrition rates.
Approximately two-thirds of these revenues stem from banking, financial services, and insurance (BFSI; accounting for 30 percent of revenue), retail (15 percent), manufacturing (10 percent), and healthcare (10 percent), with the technology and services, communications, and media sectors making up the remainder.
In fiscal 2025, revenue from BFSI and retail sectors showed slight recovery, growing 2 percent (in constant currency terms), while growth in manufacturing and healthcare remained sluggish at 3-4 percent due to macroeconomic challenges.
Anuj Sethi, Senior Director at Crisil Ratings, stated that “IT spending will continue to prioritize efficiency improvements, consolidation, and cost optimization in the near term.”
Nonetheless, IT services companies are likely to experience robust deal wins, with an increasing emphasis on artificial intelligence (AI) and generative AI (Gen AI) across all segments.
While the adoption of AI is still in its early stages, companies are now integrating AI-based solutions with their traditional offerings, enhancing efficiency for end users.
According to Aditya Jhaver, Director at Crisil Ratings, “We anticipate that domestic IT services providers will remain cautious about new hiring in fiscal 2026 and will focus on employee utilization, which is estimated to be 85 percent.”
That said, companies will continue to seek acquisitions, particularly small and mid-sized opportunities that could augment their product offerings and digital capabilities.
The Crisil Ratings study examined the top 24 Indian IT services providers, which collectively represent 55 percent of the estimated industry revenue of Rs 15 lakh crore this fiscal.
