The Indian IT sector is showing signs of recovery, with HCL Technologies and Tech Mahindra playing significant roles in shaping the industry's outlook. While challenges remain, both companies are adapting to the evolving landscape and exploring new opportunities for growth.

Industry Overview

India's technology industry is projected to reach $300 billion in revenue in fiscal year 2026, demonstrating a 5.1% growth rate. This growth is driven by increasing demand for IT services, digital transformation initiatives, and the adoption of new technologies like AI. The IT services market in India is expected to reach $166.43 billion by 2030, growing at a CAGR of 13.4% from 2024 to 2030.

However, the industry faces headwinds such as slow recovery in discretionary spending and global recessionary fears. Some analysts suggest that the Indian IT industry is experiencing muted growth, possibly in the low to mid-single digits for FY26. This has led to questions about whether this is a temporary slump or a sign of deeper structural issues requiring a fundamental reset in business models and strategies.

HCL Technologies' Outlook

HCL Technologies is recognized as the world's fastest-growing IT services brand in 2025, with a 17% year-on-year increase in brand value to $8.9 billion. The company's revenue growth rate is among the highest among tier 1 global IT services companies. HCL Technologies anticipates revenue growth between 2% and 5% for FY26, with an EBIT margin guidance of 18% to 19%. The management expects about 1% of this revenue growth to come from inorganic contributions.

HCL Technologies operates through three main units: IT and Business Services (ITBS), Engineering and R&D Services (ERS), and Products & Platforms (P&P). The HCLSoftware division has shown significant growth and profitability. The company has a well-diversified portfolio, with significant exposure to healthcare and manufacturing sectors, which are expected to drive growth. HCLTech's go-to-market strategy, which combines its IT Services and ER&D business offerings, gives it an edge over its peers.

Recent developments include:

• A 10-year deal with Dunedin City Council for digital transformation.
• Partnerships with Astemo Cypremos to accelerate smart vehicle innovation.
• Collaboration with OpenAI to drive enterprise-scale AI adoption.
• Teaming up with Equinor for AI and AR in the workspace.

Tech Mahindra's Outlook

Tech Mahindra is recognized among the top 10 global IT services brands and the 'Top 5 Gainers' in Brand Strength Index score by Brand Finance. The company's brand value improved to $3.4 billion in 2025, with its Brand Strength Index (BSI) moving up from 73.4 in 2024 to 77.3 in 2025. Tech Mahindra is focused on expanding its footprint in the banking, financial services, and insurance (BFSI) sector, with a goal to increase the sector's revenue contribution from 16% to 25% by March 2027.

Key strategies and developments:

• New CEO, Mohit Joshi, aims to grow the company's banking and financial services revenue share to 25% by 2027.
• Partnership with AWS to work on GenAI applications in telecom networks.
• Focus on sustainability and digital transformation.
• Emphasis on a "Scale at Speed" approach.

Challenges and Opportunities

Both HCL Technologies and Tech Mahindra face challenges such as global economic uncertainty and evolving technology trends. To address these challenges, they are:

• Investing in AI and automation to improve efficiency and drive innovation.
• Focusing on upskilling and reskilling employees to meet the changing demands of the industry.
• Expanding into new markets and verticals to diversify their revenue streams.
• Building strategic partnerships to enhance their capabilities and reach.

The Indian IT sector is at an inflection point, requiring companies to adapt and innovate to stay competitive. While some sources suggest a cautious approach due to macroeconomic challenges, others highlight the potential for growth driven by digital transformation and emerging technologies.