Icra: Indian IT industry to see 4-6% revenue growth in FY26

New Delhi: Indian IT companies are expected to see moderate revenue growth of 4-6 per cent in FY26, with hiring likely to remain subdued until growth accelerates towards the end of the fiscal year, according to credit rating agency Icra.

The agency projected attrition level to average 12-13 per cent over the near term.

“Icra projects its sample set of Indian IT services companies (which account for 60 per cent of the industry in revenue terms) to witness a moderate 4-6 percent revenue expansion in USD terms in FY2026.

“Moreover, hiring is likely to remain low until the growth momentum picks up by the end of FY2026,” it said.

Icra’s sample set recorded a year-on-year revenue growth of 3.6 percent in USD terms during the first nine months of FY2025.

This growth was part of a gradual recovery over the past three quarters, aided by a lower base from FY2024. Additionally, there was a slight increase in discretionary spending by customers in the BFSI and retail sectors in certain markets, along with investments in Generative AI initiatives that led to new orders, Icra said.

The sample set includes Birlasoft, Coforge, Cyient, HCL Technologies, Infosys, LTIMindtree, L&T Technology Services, Mastek, Mphasis, Oracle Financial Services Software, Persistent Systems, Tata Consultancy Services, Tech Mahindra, Wipro, and Zensar Technologies.

Icra Vice President & Sector Head Deepak Jotwani said the growth momentum for ICRA’s sample set of IT services companies is likely to remain muted over the near term, owing to the looming uncertainty related to the imposition of the US trade tariffs and macroeconomic headwinds across the key markets of the US and Europe.

Policy changes by the US government for key sectors catered to by Indian IT services companies as well as future interest rate trajectory will remain the key monitorables, he said.

The IT industry experienced relief due to reduced attrition rates and wage cost inflation, which were significant concerns during FY2023 and the first half of FY2024.