AI-led services fuel strong deal momentum for Indian IT majors in Q2

Bengaluru: Indian IT services firms have witnessed strong momentum in their deal pipeline in the second quarter ended September 2025, mainly driven by artificial intelligence (AI)-led services.

Tata Consultancy Services (TCS) has reported a total contract value of $10 billion in Q2 and its BFSI TCV stood at $3.2 billion. Its revenue from operations was up 2.4% year-on-year (YoY) at Rs 65,799 crore in the second quarter.

“Our TCV (total contract value) had a sequential increase of 6.5% and a year-on-year growth of 16%. More importantly, this quarter, we announced a significant mega deal win with Tryg Insurance. Based on client conversations, Q2 revenue growth and TCV, and a strong demand pipeline, we see FY26 international revenue growth to be better than last fiscal year,” TCS CEO and MD K Krithivasan said, during the company’s earnings conference call.

He added that the company will become the world’s largest AI-led technology services company, enabling business, government and society. 

The CEO also said that they are redesigning business value chains for every industry and they are also investing in development of innovative cross industry solutions leveraging AI.

IT services firms are now deepening their partnerships in the AI ecosystem. For instance, TCS has recently announced a partnership with Google Cloud to integrate Gemini Enterprise for its workforce and customers.

Infosys, which recently won a contract worth over Rs 14,100 crore from the NHS Business Services Authority (NHSBSA), will use AI-driven tools to streamline workforce planning of the NHS.

The company’s TCV of large deal wins was $3.1 billion, with net new of 67% in Q2.

“Strong deal wins, with 67% net new in Q2, reflect our deep understanding of clients’ priorities to deliver value from AI in this environment”, said Infosys CEO and MD Salil Parekh.

Enterprise AI companies are increasingly building modernisation solutions for clients, and Infosys is partnering with several of them, leveraging its deep knowledge of enterprise IT landscapes, Motilal Oswal said in its results update.

In Q2, Wipro closed $4.7 billion in TCV and signed 13 large deals. “Much of this demand is driven by vendor consolidations, AI-powered transformations, and consulting-led programmes—areas where our strategy is truly making an impact,” Wipro CEO and MD Srini Pallia said.

Wipro’s order bookings in Q2 include two mega deals- one with a healthcare client and another in BFSI. “While a significant portion of these two deals are renewals, they are important for deepening our presence and unlocking future growth in these accounts,” the CEO added.

For the first time, HCLTech reported that its advanced AI quarterly revenue crossed $100 million. 

Due to this AI-driven approach, AI skills are much in demand. 

Demand for skills in artificial intelligence is common across several engineering categories, led by industrial engineering (17%), mechanical engineering (11%) and electrical engineering (9.2%), said hiring platform Indeed in its latest report. It said AI-related job postings rose to 11.7% in September.

Sachin Alug, CEO, NLB Services, said Q2 FY26 indicates a renewed wave of confidence across the IT sector, with firms accelerating investments in AI-driven transformation, digital innovation, and delivery expansion in key global markets. “The strong emphasis on building localised talent hubs, particularly in advanced technology and AI domains, reflects a strategic move towards reducing dependency on cross-border mobility while strengthening client delivery capabilities,” he said.

Total headcount in Q2 declines

In the second quarter, the total headcount of top five IT firms- TCS, Infosys, HCLTech, Wipro and Tech Mahindra, together were down by 1,606 employees, mainly due to TCS as the company’s headcount alone declined by 19,755 employees in Q2. Infosys has added 8,203 employees and HCLTech added 3,489 employees in the September quarter. Wipro and Tech Mahindra have added 2,260 and 4,197 (total including IT, BPS and Sales & support) employees, respectively. But if only IT headcount is taken into consideration, Tech Mahindra’s headcount declined by 1,459.

“Hiring sentiment remains steady, with an expected increase in fresher onboarding and lateral hiring across AI, cloud, cybersecurity, and data-led roles. The growing focus on generative AI, automation, and platform engineering continues to redefine workforce requirements. Organisations are actively upskilling employees to stay ahead of rapid technology shifts while fostering resilience amid evolving global dynamics. This balanced approach of innovation-led growth and workforce adaptability is likely to translate into sustained hiring traction through the coming quarters,” Alug said.