Indian IT sector shows signs of gradual recovery as deal wins improve
New Delhi, Nov 28
India’s IT sector is showing early signs of a gradual recovery, with deal wins improving and revenue outlook stabilising, a new report said on Friday.
The report, released by BNP Paribas India, highlights that while Indian IT companies continued to lag global peers in revenue growth during the September 2025 quarter, their performance in securing new deals remained strong, signalling a healthier pipeline for the coming quarters.
According to the findings, the global IT services industry reported 3.8 per cent year-on-year revenue growth in USD terms during the September quarter, slightly lower than the 4.3 per cent growth seen in the June quarter.
However, India-based IT firms grew only 1.2 per cent in constant currency.
This slower pace was partly due to stronger performances by global players such as Accenture, EPAM and ADP, along with the euro’s appreciation against the dollar.
Among industries, BFSI led revenue growth with 7.9 per cent year-on-year expansion, while verticals like retail, manufacturing, and energy also performed well.
Communications remained the weakest segment. Region-wise, revenue from the Americas grew 4 per cent, slightly slower than before, while Europe showed a stronger recovery with 4.3 per cent growth.
The report, led by analyst Kumar Rakesh is based on an analysis of quarterly results from 24 major IT services companies across India, the Americas, and Europe.
This sample includes 13 Indian firms and reflects broad global industry trends.
Despite slower revenue expansion, the report points to improving business sentiment.
The firm’s outlook index, based on management commentary, suggests that project delays bottomed out in the June quarter, and companies are now seeing better visibility on deal signings.
Margins have also improved modestly due to higher productivity, better utilisation, and lower attrition levels.
Headcount increased slightly, but productivity gains helped offset cost pressures.
The report adds that Indian IT companies outperformed global peers in total contract value (TCV) of deals signed during the quarter.
Vendor consolidation trends continued, with top clients contributing a larger share of revenue across major firms.
— IANS
Reader Comments
Good to see BFSI leading the growth at 7.9%! That's our bread and butter sector. But we need to focus more on digital transformation projects rather than traditional maintenance work. The gap with global players is still concerning though.
Finally some positive news! The IT sector has been through tough times with layoffs and hiring freezes. Lower attrition and better utilization are definitely good signs. Hope this recovery is sustainable and not just temporary.
While the deal wins are promising, I'm concerned about the 1.2% growth compared to global 3.8%. Indian IT needs to invest more in AI and emerging technologies to stay competitive. We can't just rely on cost arbitrage anymore.
The Europe recovery at 4.3% is interesting! With many European companies looking to diversify from traditional vendors, Indian IT firms have a great opportunity here. Need to build stronger local presence in EU markets.
As a fresher who joined Infosys last month, this news gives me hope! Was worried about job security after hearing about the slowdown. Good to know companies are hiring again and productivity improvements are helping margins. ðŸ‘
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