AI bets start paying off for Indian IT as pilots turn into big-ticket deals

Indian IT companies are finally beginning to see tangible returns on their investments in artificial intelligence, as clients transition from pilots and proofs-of-concept (PoCs) to large-scale, AI-led transformation projects.

After nearly two years of experimentation, most large technology services firms say enterprises are now ready to deploy AI at scale, setting the stage for stronger deal momentum through 2026. The shift was a recurring theme across third-quarter earnings calls, with executives pointing to a clear transition from experimentation to ROI-driven implementation.

India’s largest IT services provider, Tata Consultancy Services (TCS), has set itself an ambitious goal: becoming the world’s largest AI services company. AI services at TCS now generate $1.8 billion in annualised revenue, growing 17.3% quarter-on-quarter and accounting for nearly 6% of its total revenues, far outpacing the growth of its core business.

Aarthi Subramanian, president and COO at TCS, said 2025 marked a turning point in enterprise adoption.   “Till mid-2024, we were largely experimenting and running pilot projects. If you really look at 2025, the adoption in our customer landscape has significantly increased. We have shifted from PoCs and pilots to ROI-led scaled implementations, and that’s what is driving this growth,” she said during the company’s earnings call.

Infosys is seeing a similar inflexion point. CEO Salil Parekh said the company is now working with 90% of its top 200 clients on AI-led programmes.

“We had strong momentum in AI adoption across our client base. Today, we work with 90% of our largest 200 clients to unlock value with AI. We are currently working on 4,600 AI projects,” Parekh said.

From experimentation to execution

Indian IT firms have been investing heavily in AI capabilities across cloud, data, engineering and enterprise platforms for several years. However, the revenue impact has lagged behind the hype. Industry executives now believe 2026 will be the year when AI-led projects reach critical mass and begin to meaningfully move the needle on growth.

Much of the next phase of growth is expected to come from the convergence of traditional AI, generative AI and agentic AI, allowing companies to offer deeper, more comprehensive transformation programmes rather than point solutions. 

This shift is also changing the nature of deal-making.

HCLTech announced new deal wins worth $3 billion in the December quarter, including a five-year strategic engagement with a global apparel retailer with a total contract value of $473 million, where it will serve as the client’s long-term AI-led technology partner.

CEO C Vijayakumar said AI growth is increasingly being driven by what the company calls “Advanced AI”, which contributed $146 million in revenue during the quarter. This includes work in areas such as physical AI, robotics, agentic AI, data centres and intellectual property, going well beyond simply embedding AI into existing services.

“We are seeing large AI-led service transformations, net new deals happening, and service transformation increasingly becoming core to decision-making in every pursuit,” Vijayakumar said. “Certain use cases like AI-led legacy modernisation are also creating niche interest amongst our clients.”

On the back of strong client demand, HCLTech raised its full-year services revenue growth guidance to 4.75%–5.25% in constant currency terms.

Bigger deals, deeper transformation

The transition to AI-led delivery is reshaping how deals are being structured, with a sharper focus on operating model transformation rather than traditional outsourcing or cloud-led modernisation. These contracts are expected to be larger, longer-term and more strategic in nature.

According to an IT sector report published by HDFC Securities in December 2025, Indian IT companies have decisively shifted their focus from digital transformation to AI-centric engagements over the past six quarters.

"Indian IT companies have notably shifted their focus from traditional digital transformation projects to AI-centric engagements. This is evident in the significant acceleration in AI-focused deal wins among leading firms,” the report said.

HCLTech stood out with 139 AI-related deals, accounting for nearly 72% of its total deal wins, while TCS reported 81 AI deals, making up around 76% of its total. The report said this reflected the companies’ strategic investments in AI platforms and modernisation capabilities.

While Wipro and Tech Mahindra did not separately disclose the share of AI revenues, both companies reported a sharp rise in AI-led deal activity. 

Wipro CEO Srini Pallia said clients are now focused on cost optimisation, vendor consolidation and a clear shift towards AI-led transformation. The company recently signed a large deal with a global education provider in the UK, where it will embed automation and AI-driven insights while standardising core processes.

Tech Mahindra, meanwhile, announced one of the largest deals in its history with a European telecom services provider aimed at accelerating innovation and delivering AI-led operational efficiencies.

“Our deal wins on an LTM basis are the highest we have achieved in the past five years, reflecting an improved deal-win run-rate over the past several quarters,” said Mohit Joshi, CEO of Tech Mahindra. “The momentum is a testament to our sustained investments in sales, solution-oriented go-to-market and the growing relevance of our AI-led offerings.”

Gearing up for the AI decade

While optimism is high that AI interest will translate into sustained large deals, IT firms are also racing to build internal capabilities to support the shift. 

From using AI to streamline their own operations to reskilling employees, companies are investing heavily behind the scenes.