IT industry to see 4-6% revenue growth in FY26; hiring to remain low: Icra

Indian IT firms are anticipated to see reasonable income development of 4-6% in FY26, with hiring more likely to stay subdued till development accelerates in the direction of the top of the fiscal 12 months, based on credit standing company Icra. The company projected attrition stage to common 12-13% over the close to time period.

“Icra tasks its pattern set of Indian IT providers firms (which account for 60% of the business in income phrases) to witness a reasonable 4-6% income enlargement in US greenback phrases in FY2026.”

“Furthermore, hiring is more likely to stay low till the expansion momentum picks up by the top of FY2026,” it mentioned.

Icra’s pattern set recorded a year-on-year income development of three.6% in US greenback phrases in the course of the first 9 months of FY2025.

This development was a part of a gradual restoration over the previous three quarters, aided by a decrease base from FY2024. Moreover, there was a slight improve in discretionary spending by clients within the BFSI and retail sectors in sure markets, together with investments in Generative AI initiatives that led to new orders, Icra mentioned.

The pattern set consists of Birlasoft, Coforge, Cyient, HCL Technologies, Infosys, LTIMindtree, L&T Know-how Companies, Mastek, Mphasis, Oracle Financial Services Software, Persistent Systems, Tata Consultancy Services, Tech Mahindra, Wipro, and Zensar Technologies.

Icra Vice President & Sector Head Deepak Jotwani mentioned the expansion momentum for ICRA’s pattern set of IT providers firms is more likely to stay muted over the close to time period, owing to the looming uncertainty associated to the imposition of the US commerce tariffs and macroeconomic headwinds throughout the important thing markets of the US and Europe. Coverage modifications by the US authorities for key sectors catered to by Indian IT providers firms in addition to future rate of interest trajectory will stay the important thing monitorables, he mentioned.

The IT business skilled reduction on account of diminished attrition charges and wage price inflation, which had been vital issues throughout FY2023 and the primary half of FY2024.

“Icra expects hiring to stay low within the close to time period till the expansion momentum picks up by the top of FY2026. Decrease hiring exercise may also be correlated with increased investments by the business in GenAI and the anticipated advantages by way of elevated productiveness and value financial savings,” the company mentioned.

Main Indian IT providers firms have educated a major variety of their staff in Generative AI expertise and are actually increasing their capabilities and repair choices to offer GenAI-based options to their shoppers, it added.

“This has began to indicate outcomes because the influx of GenAI-related offers for main business gamers has risen in latest quarters and is predicted to select up materially over the medium time period, as total know-how adoption is extra pervasive. The healthcare and BFSI sectors stay the early adopters of AI/GenAI capabilities and proceed to put money into the identical,” Jotwani mentioned.