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Wipro was forced to pause an active SAP project due to client’s jitters

India’s big four IT services players are all concerned that the USA’s new tariffs regime may see some of their customers spend less on tech – but later spend more to cope with whatever changes are needed to compete in a changed global trade system.

The four companies – Infosys, Tata Consulting Services (TCS), Wipro and HCL Tech – have all announced their results in the last ten days and all expressed concerns about tariffs impacting their business.

Wipro CEO Srinivas Pallia had the most vivid example of US tariffs’ impact.

“We were doing a large SAP program, which was very critical for the client, and this was in the consumer sector,” he said on the company’s Q4 2025 earnings call last week. “And when the client heard about the tariff situation, they were bang in the middle of that, and they put the whole program on pause, not because they don't want to do the program, but they wanted to understand, get the certainties of the tariff situation.”

The CEO said incidents of that sort have “definitely impacted our revenue growth momentum across sectors and markets.”

He later said clients “are holding back on any further investments” as they try to understand the impact of tariffs.

Pallia hopes tariffs aren’t all bad news for Wipro in the longer term, suggesting that once their disposition and impact is better understood businesses will lean on IT to plan new manufacturing and logistics arrangements that help them reduce costs. But for now he sees consumer manufacturing, and especially the automotive industry, slowing down their tech spend.

Infosys CEO Salil Parekh also noticed an impact on the retail sector, which he said “has been impacted by economic uncertainty resulting in lower consumer spending in core markets due to recent tariff announcements, client budgets are expected to be tightened and there is increased caution.”

CFO Jayesh Sanghrajka weighed in with his view that “In high-tech, most clients remain cautious due to the macroeconomic headwind and tariff announcement with discretionary spend still remaining under pressure.”

TCS CEO K Krithivasan said the company’s consumer group “saw heightened caution and delays in discretionary projects, especially in the US.”

He blamed those behaviors on “the significant drop in consumer sentiment in February, which preceded changes in global trade and tariffs creating a domino effect on retail consumer packaged goods.” The CEO also said TCS has also felt “more impact” among its clients in the airline, travel and hospitality industries.

HCL CEO C Vijayakumar said his company has not seen “any specific impact so far” from the USA’s tariffs, but said he expects consumer and manufacturing companies will be the first to feel an effect – but that all industries will eventually be impacted.

He feels that’s not entirely bad for HCL because tariffs will drive customers to reduce costs.

“Their intention and focus on using generative AI to drive high efficiency in every aspect of their business will become the center stage of all the conversations [about technology strategy].”

“So we believe while there is uncertainty and there is going to be definitely a deterioration in the discretionary spend, we think AI efficiency is really the biggest theme where there can be large opportunities.”

“We have a strong pipeline and while there is conservatism in the way we look at our guidance, we think this is a great opportunity to create significant opportunities for us in the market,” he added.

Healthy giants

While they wait to deal with the impact of tariffs, all four companies have healthy balance sheets.

TCS achieved 3.8 percent annual growth for FY 2025 revenue of $30.18 billion. Infosys delivered $19.28 of revenue, a 4.2 percent increase. HCL grew even faster – 4.3 percent – to finish its financial year with revenue $13.84 billion.

Wipro revenue slipped 0.7 percent for the year, coming in at $10.7 billion.

All four are profitable and have margins hovering around 20 percent. ®