Indian IT Services companies have already been grappling with demand slowdown over the past several quarters and now artificial intelligence (AI) is emerging as a new structural disruptor. While AI is likely to affect some service lines more than others, with implications for pricing models and employment intensity too, it is also creating new revenue opportunities.

• Revenue growth in USD terms for ICRA’s sample set* of Indian IT services companies is projected to be a modest 2-3% in FY2026 and 3-4% FY2027 (against 3.6% in FY2025) owing to a continued moderated demand environment and Generative Artificial Intelligence (GenAI) driven uncertainties.
• The US and Europe together account for 80-90% of the industry’s revenues and growth in both these markets has moderated over the past few quarters due to persistent macroeconomic headwinds. Comparatively, growth in Europe has been more resilient than the US, supported by healthy deal execution in some key verticals such as Banking, Financial Services and Insurance (BFSI) and healthcare, as reported by some of the industry players.

Source: ISG, ICRA Research, Value in $ Billion