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Indian IT Giants Signal Caution with Weak Results and Strategic Shifts

TCS, Infosys, and Wipro report profit declines and muted FY26 growth forecasts, as US tariffs and shifting client priorities reshape the industry landscape.

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Overview

  • TCS and Infosys reported Q4 FY25 profit declines of 1.7% and 11.7%, respectively, with Wipro forecasting revenue drops for Q1 FY26.
  • US tariff policies under President Donald Trump are creating economic uncertainty, leading to reduced discretionary IT spending by Western clients.
  • The big three IT firms are deferring wage hikes and shifting focus to essential, survival-oriented projects, while exploring generative AI as a potential growth driver.
  • Mid-tier IT companies like Coforge and Persistent Systems are gaining traction by securing cost-sensitive deals that larger firms are struggling to capture.
  • Despite challenges, TCS, Infosys, and Wipro collectively added 1,438 employees in Q4 FY25, signaling a cautious but ongoing investment in workforce and AI capabilities.