IT sector: From cyclical resilience to strategic relevance

In the unfolding economic narrative of 2026, the Indian IT services industry finds itself at a crossroads that many analysts describe as the Great Integration; a phase of traditional outsourcing models giving way to Al-infused digital transformation engagements.

- SIDDHARTH PAI

The term captures a broader realignment of enterprise tech spending, where artificial intelligence (Al) is no longer a niche proof-of-concept but a strategic lever for automation, customer experience re-imagination and core operational redesign. This is reshaping revenue streams and talent strategies across IT majors like Tata Consultancy Services (TCS), Infosys and others, and the latest corporate earnings and hiring commentary offer early signals of demand.

Infosys, which reported its results for the third quarter of 2025-26 last week, offered one of the clearest articulations of this shift. Despite a 2.2% fall in profits, it posted an almost 9 % on-year revenue rise to ₹45,479 crore, driven in large part by stronger Al and cloud transformation deals, and raised its 2025-26 revenue growth outlook to a range of 3-3.5% in constant currency terms. Its management highlighted large Al-led contract wins across client sectors, including deals that deploy Al-centric platforms which integrate data, workflows and autonomous agents into enterprise environments. This underlines how Al is getting embedded in services that clients are willing to pay for, even as broader demand softness persists.