India’s top IT services firms are seeing a growing gap between strong deal wins and muted revenue growth, as a shift toward large, AI-led, and outcome-based contracts delays conversion of bookings into near-term revenue.
Sidhant Rastogi, President, Zinnov, noted that TCS, Infosys, HCLTech, and Tech reported a combined $68.7 billion of FY26 TCV against a reported FY26 revenue of roughly $60 billion.
“Historically, the cohort ran at 32 to 35 per cent first-year conversion; in FY26, it converted at closer to 28 per cent. Three factors explain the compression. First, AI-embedded transformation programmes now take 9-12 months from signing to revenue, versus 4-6 months for traditional staffing deals. Second, deal sizes have grown materially. Third, a rising share of wins are outcome-based or AI-co-created contracts, where revenue follows value delivery, not effort. The gap reflects that the deals being signed are structurally more valuable than the deals of two years ago,” he said.
Piyush Goel, the CEO & Founder of Beyond Key, echoed this, adding that the lag between orders and revenues is a product of the complexity of solutions, implementation, and time required for proper rollout and adoption.
“Many recent successes are related to enterprise-wide digitisations and AI implementations, for which a comprehensive discovery, integration strategy, and staged roll-out are prerequisites. Thus, there is a logical lag between signing and recognising the revenues. Customers increasingly value result-oriented deployments, which take longer to realise but create greater value for longer periods. This is a sign of a shift towards large and more strategic deals,” he said.
Customers tend to move away from point-solution deployments towards platform implementations that encompass AI, cloud, and advanced analytics. Such technology implementations require a higher degree of architecture alignment and regulatory approvals before scaling. The increase in cybersecurity requirements and data migration efforts also contributes to the ramp-up period. However, on average, such deployments generate multi-year revenue streams, Goel said.
C. Vijayakumar – CEO & MD, HCLTech, during the Q4 conference call said, “Apart from sequential decline due to seasonality in the software business, we saw a delay in procurement decisions in March that resulted in revenue coming below our expectations," with US telecom spending cuts and SAP-related cancellations flagged as the specific drivers.
Rastogi said that as firms shift from input-based billing to outcome- and platform-led contracts, revenue recognition becomes back-loaded to milestones rather than linear, making traditional conversion assumptions less reliable.
Alongside, Wipro CEO and MD Srini Pallia shared that in Q4, the company saw significant softness in Americas 2, specific to the BFSI sector. This has been a combination of both client-specific issues and delayed ramp-up. The reason for the delay is client-specific, but the company sees an opportunity that will give it growth in that particular account and sector.
Published on April 24, 2026