Indian IT giants Tata Consultancy Services (TCS), Infosys, and Wipro have released a cautious forecast for FY26, indicating a slowdown in the conversion of deals into revenues, while announcing significant contract wins in the March quarter. Concerns about tariff-related interruptions, client decision-making delays, and macroeconomic uncertainties were raised by executives and brokerages alike. These issues are anticipated to have an impact on profitability in the upcoming quarters.
With 17 significant deals totaling $1.8 billion in Q4FY25, up from over $1 billion the previous quarter, Wipro recorded a strong deal activity. Deal wins for the corporation in Q4 were $4 billion, up from $3.5 billion in Q3. Additionally, the business closed 63 big deals and secured two mega deals in FY25.
“Q1 guidance reflects temporary freeze on client budgets,” Motilal Oswal emphasized. We anticipate a 1.9% YoY sales decline in FY26 in constant currency due to a weak departure in Q4 (FY25) and the suggested decline in Q1. It further stated that “Deal TCV (total contract value) was strong, but this has been the case over FY24-25, and lower conversion could be caused by potential leakage and deferrals.”
Wipro’s Q1FY26 projection “is the weakest ever (except Covid), implying heightened uncertainty in client decision making due to the global tariff war,” according to ICICI Securities. It went on to say, “Delays in decision-making, ramp-downs, and guidance factors in a standstill in significant transformation initiatives… Weak forecast suggests that Wipro will continue to perform poorly and see a drop in revenue in FY26.
Similarly, TCS reported a TCV of $12.2 billion in Q4FY25, a notable increase from $10.2 billion in the previous quarter. However, this performance was not reflected in revenue growth. “There was some amount of project deferral that happened in March that was uncertain. We were hoping that revenue growth would’ve been higher than 1% when we were in the early part of the quarter. But what we were primarily looking at is all business verticals are growing and all major markets are growing,” TCS CEO K Krithivasan said.
However, Krithivasan remained cautiously optimistic about the year ahead. “We expect CY25 to be better than CY24 based on the order book that we have announced and kind of deals we have signed. While there could be some short-term uncertainties, but FY26 would be a better year than FY25,” he said.
Infosys, too, posted large deal TCV of $2.6 billion for the quarter, marginally up from $2.5 billion in Q3. For the full fiscal year, the company secured $11.6 billion in large deals, of which 56% were net new. However, the company missed revenue expectations in Q4 and projected a lower growth forecast for FY26 at 0–3% in constant currency, compared to 4.5–5.0% for FY25.
CEO Salil Parekh said: “A slowdown in client spending on large-scale IT projects amid rising geopolitical and macroeconomic uncertainties” as the key reason for the muted forecast.
According to Motilal Oswal, “The management struck an optimistic tone on guidance: The upper end of Infosys guidance assumes a ‘stable to marginally improving environment’.” However, the brokerage cautioned that “discretionary spends are certainly not recovering in a hurry, and we continue to remain below consensus.”
Additionally, with further estimate reduction anticipated, brokerages are highlighting risks to FY26 earnings across all sectors. The general atmosphere for discretionary spending is still cautious, even though banking customers are steady and technology is still a top focus for most businesses, particularly in the US. As a result, there is now a discrepancy between the strong deal bookings and the real revenue increase.
Motilal Oswal states that “as clients absorb the uncertainty, we believe verticals like Retail & Consumer, Manufacturing, Hi-Tech & Software, etc. could see delayed or deferred tech spending at least for the next quarter (1QFY26E).”
