Despite reporting strong deal wins in the March quarter, Indian IT majors Tata Consultancy Services (TCS), Infosys and Wipro have issued a muted outlook for FY26, pointing to a slowdown in the conversion of deals into revenues. Executives and brokerages alike highlighted concerns over macroeconomic uncertainties, tariff-related disruptions, and delays in client decision-making, which are expected to weigh on performance in the coming quarters.
Wipro reported a robust deal activity, closing 17 large deals worth $1.8 billion in Q4FY25 — up from nearly $1 billion in the previous quarter. The company’s total deal wins in Q4 stood at $4 billion, an increase from $3.5 billion in Q3. And for FY25, the company closed 63 large deals and bagged two mega deals.
But, despite the strong pipeline, Wipro offered a cautious outlook for Q1FY26, guiding for a sequential topline decline of 3.5-1.5%.
Motilal Oswal highlighted that “Q1 guidance reflects temporary freeze on client budgets… A poor exit in Q4 (FY25) and the implied decline in Q1 drive our expectation of 1.9% YoY revenue decline in FY26 in constant currency.” It added, “Deal TCV (total contract value) was strong, but this has been the case over FY24-25, potential leakage and deferrals could lead to lower conversion.”
ICICI Securities noted that Wipro’s guidance for Q1FY26 “is the weakest ever (except Covid), implying heightened uncertainty in client decision making due to global tariff war.” It further stated, “Guidance factors in a pause in large transformation projects, ramp downs and delays in decision making… Weak guidance implies continued underperformance and yet another year of revenue decline for Wipro 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.”
Further, brokerages are flagging risks to FY26 earnings across the sectors, with expectations of further estimate cuts. While banking clients remain stable, and technology remains a strategic priority for most enterprises, especially in the US, the broader discretionary spend environment remains cautious. This has led to a gap between the robust deal bookings and the actual revenue growth being realised.
As per Motilal Oswal, “We believe verticals such as Retail & Consumer, Manufacturing, Hi-Tech & Software, etc, could see delayed or deferred tech spending at least for the next quarter (1QFY26E) as clients absorb the uncertainty.”
On similar line Wipro’s Srini Pallia said that some sectors like consumer and manufacturing are directly impacted on how the macroeconomic uncertainty is being played out. “But, BFSI has been doing very well for us, particularly around Capco, APMEA (Asia Pacific, Middle East, and Africa) and even in the US,” Pallia said.