While the March quarter is usually soft due to seasonality, the broader macroeconomic environment also turned unfavourable in the latter half of the year. Clients became increasingly cautious in the face of uncertainty, leading to a slowdown in decision-making. Many discretionary and new projects were put on hold, even as cost-optimisation work continued. Projects where the return on investment wasn’t immediately clear were especially impacted.
Concerns are also rising in key verticals like manufacturing, automotive, retail, and logistics, with companies flagging potential stress ahead.
Despite the soft revenue performance and subdued client commentary, deal wins were surprisingly strong. HCLTech saw a 43% jump in deal wins quarter-on-quarter. TCS reported a 20% sequential rise in orders, clocking $12.2 billion in new deals. Infosys landed large deals worth $2.6 billion, and Wipro’s total contract value approached $4 billion.
Looking ahead, the FY26 outlook wasn’t as weak as some had feared, even though it fell short of street expectations from a month ago. Wipro has guided for a revenue decline of 3.5% to 1.5% in the April-June quarter (Q1FY26). Infosys expects growth of up to 3%, while HCLTech forecasts 2% to 5% growth.
Interestingly, companies are now offering wider guidance bands than usual. While the top-line forecast typically varies by two percentage points, this time the spread is broader due to ongoing macro uncertainty.
On a slightly more stable note, Infosys and HCLTech have kept their margin guidance unchanged for FY26.
FY25, overall, turned out to be a tough year for the sector. HCLTech led the pack with 4.7% revenue growth. Infosys and TCS were close behind at 4.2%, while Wipro reported its second consecutive quarter of revenue decline, rounding off a difficult year.
