The Indian IT services industry is navigating a period of near-term challenges, including subdued discretionary technology spending, macroeconomic uncertainties in key markets, and the initial impact of GenAI[1]led productivity gains on traditional services demand. However, as organisations scale Gen AI from pilot to enterprise-wide deployments, Indian IT services companies could benefit from growing demand for GenAI-led transformation, application modernisation, data engineering, cloud, and cybersecurity, supported in part by collaboration with global AI giants.

• Revenue growth in USD terms for ICRA’s sample set of Indian IT services companies is projected to be a modest 3-5% in FY2027 (against 3.5% in FY2026) owing to a continued moderated demand environment for traditional IT services driven by delayed discretionary spending due to Generative Artificial Intelligence (GenAI) uncertainties.
• ICRA maintains a Stable outlook on the industry, supported by the strong global position of the Indian IT services companies, stable attrition rates, and controlled wage costs that will enable the industry to maintain stable profitability. The balance sheets of mid to large industry players remain strong, marked by low financial leverage and healthy cash and cash equivalents. 

Source: ISG (Information Services Group), ICRA Research; Value in $ billion