‘AI deflation’ comes to India’s tech services giants and puts downward pressure on revenue
India's top tech services firms—Infosys, HCL, TCS, and Wipro—are experiencing 'AI deflation,' with AI-driven efficiency reducing revenue growth despite steady headcounts. While annual results show mixed performance, leaders acknowledge AI is pressuring pricing and future revenues. Companies are adapting by winning AI-centric deals and integrating AI into operations to maintain competitiveness. However, revenue forecasts for the coming year reflect a downward trend due to reduced labor needs and pricing pressure from automation.
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AI + ML ‘AI deflation’ comes to India’s tech services giants and puts downward pressure on revenue Headcounts, however, are mostly holding up Simon Sharwood Tue 28 Apr 2026 // 05:34 UTC AI is beginning to make a dent in the business models of India’s big four technology services giants Infosys, HCL, TCS, and Wipro have all announced quarterly results in the last ten days, and all had mixed news. HCL, for example, told investors annual revenue grew 11.2 percent for FY 2026, and headcount rose almost two percent. But the company also pointed to “AI deflation” that CEO C. Vijayakumar explained means future revenue will dip between three and five percent in the coming year, and perhaps further in the future. <a href="https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/aiml&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2afBeQY19d8CZte6xxFEJMAAAAAg&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0" target="_blank"> <img src="https://pubads.g.doubleclick.net/gampad/ad?co=1&iu=/6978/reg_software/aiml&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2afBeQY19d8CZte6xxFEJMAAAAAg&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0" alt=""> </a> Infosys CEO Salil Parekh said he expects deflation to become a factor in the future, but predicted the company will continue to grow this year after last year brought 3.1 percent revenue growth. <a href="https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/aiml&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44afBeQY19d8CZte6xxFEJMAAAAAg&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0" target="_blank"> <img src="https://pubads.g.doubleclick.net/gampad/ad?co=1&iu=/6978/reg_software/aiml&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44afBeQY19d8CZte6xxFEJMAAAAAg&t=ct%3Dns%26unitnum%3D426raptor%3Dfalcon%26pos%3Dmid%26test%3D0" alt=""> </a> <a href="https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/aiml&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33afBeQY19d8CZte6xxFEJMAAAAAg&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0" target="_blank"> <img src="https://pubads.g.doubleclick.net/gampad/ad?co=1&iu=/6978/reg_software/aiml&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33afBeQY19d8CZte6xxFEJMAAAAAg&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0" alt=""> </a> Wipro CFO Aparna Iyer pointed to lower margins in some deals, and a need “to drive operational improvement that is a continuous process” despite the company posting four percent annual revenue growth. TCS saw annual revenue slip 0.5 percent year-over-year and CEO K Krithivasan admitted he’s also seeing deflation – which he called “degrowth.” <a href="https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/aiml&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44afBeQY19d8CZte6xxFEJMAAAAAg&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0" target="_blank"> <img…
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