Despite ongoing macroeconomic challenges and growing uncertainty in the major US and European markets, the Indian IT services sector is expected to maintain its 6–8% (in rupee terms) growth in fiscal 2026, a report released Thursday said.

According to the Crisil Ratings study, currency depreciation benefits of 2% will also help to enhance the revenue growth. The Indian IT services sector is expected to increase by mid-single digits for the third consecutive fiscal year. Operating profitability is still strong, nevertheless, thanks to a small increase in staff and low turnover.

Banking, financial services, and insurance (BFSI; revenue share of 30%), retail (15%), manufacturing (10%), and healthcare (10%) account for nearly two-thirds of total revenues, with the majority of the remaining revenue coming from technology and services, communications, and media.

While manufacturing and healthcare growth remained slow at 3–4% in fiscal 2025 due to macro concerns, revenue from the BFSI and retail categories experienced a modest comeback, increasing 2% (on constant currency terms). According to Anuj Sethi, Senior Director at Crisil Ratings, “in the near term, IT expenditures will continue to be concentrated on cost optimization, consolidation, and efficiency gains.”

Nevertheless, with a growing emphasis on artificial intelligence (AI) and generative AI (Gen AI) across all categories, IT services providers will continue to achieve good transaction wins. Although the application of AI is still developing, companies are now combining AI-based products with their conventional services to increase end customers’ efficiency.

“We expect domestic IT services providers to remain cautious on fresh hiring in fiscal 2026 and maintain focus on employee utilisation, estimated at 85%,” stated Aditya Jhaver, Director, Crisil Ratings.

Players will nevertheless keep an eye out for acquisitions, particularly small and mid-sized ones that could expand their product lines and digital capabilities. The top 24 Indian IT service providers, which accounted for 55% of the industry’s projected revenue of Rs 15 lakh crore this fiscal year, were examined in the Crisil Ratings report.