AI bets start paying off for Indian IT as pilots turn into big-ticket deals

Indian IT companies are witnessing significant progress in reaping the benefits of their investments in artificial intelligence. After nearly two years of exploration, businesses are moving from pilot projects and proofs-of-concept to expansive AI-driven transformation initiatives. This evolution is expected to boost deal momentum through 2026, as major technology service providers report a clear shift towards large-scale implementations driven by ROI. Tata Consultancy Services (TCS), India’s leading IT service provider, is setting ambitious targets to become the foremost AI services company globally. Currently, TCS’s AI services contribute $1.8 billion in annual revenue, reflecting a robust quarter-on-quarter growth of 17.3%, which represents nearly 6% of its total revenues. Aarthi Subramanian, TCS’s president and COO, highlighted that 2025 will be pivotal for enterprise adoption, marking a transition from experimentation to large-scale implementations. Similarly, Infosys is experiencing a turning point, with CEO Salil Parekh noting that 90% of their top 200 clients are now engaging in AI-led initiatives. With 4,600 AI projects underway, Infosys is capitalizing on this increasing momentum in AI adoption across its client base. Indian IT firms have invested heavily in developing AI capabilities over the past few years, particularly in areas like cloud, data, and enterprise platforms. However, as executives now anticipate that 2026 will see a critical mass of AI-led projects, the revenue impact is expected to shift significantly. Future growth is likely to stem from the integration of traditional AI with generative and agentic AI, enabling firms to provide more comprehensive transformation programs rather than isolated solutions. The nature of deal-making is also evolving. HCLTech recently reported $3 billion in new deals for the December quarter, including a substantial five-year engagement with a global apparel retailer. CEO C Vijayakumar noted that their growth in AI is increasingly driven by what they term 'Advanced AI', which generated $146 million this past quarter, showcasing their commitment to areas like physical AI and robotics. Additionally, a report from HDFC Securities indicates that Indian IT companies are shifting focus from traditional digital transformation efforts to AI-centric projects. HCLTech recorded a remarkable 139 AI-related deals, while TCS achieved 81, highlighting the strategic investments being made in AI capabilities. As the industry gears up for what could be a transformative decade for AI, IT firms are also prioritizing the development of internal capabilities. This includes utilizing AI to enhance their operations and reskilling employees to support this evolving landscape.