Indian IT Sector Shows Signs of Gradual Recovery as Deal Wins Strengthen

New Delhi— India’s IT sector is showing early signs of a steady recovery, with improved deal wins and a stabilising revenue outlook, according to a new report released by BNP Paribas India on Friday.

The report highlights that while Indian IT companies continued to trail global peers in revenue growth during the September 2025 quarter, they performed strongly in securing new deals—an indicator of a healthier business pipeline in the months ahead.

Globally, the IT services industry recorded 3.8 per cent year-on-year revenue growth in USD terms for the September quarter, slightly lower than the 4.3 per cent growth posted in the June quarter.
In comparison, Indian IT firms grew only 1.2 per cent in constant currency, lagging behind global players such as Accenture, EPAM, and ADP. The euro’s appreciation against the dollar also played a role in skewing the comparison.

Across sectors, BFSI continued to lead with 7.9 per cent year-on-year growth. Retail, manufacturing, and energy posted healthy performances, while communications remained the weakest vertical.

Region-wise, revenue from the Americas rose 4 per cent—slower than earlier quarters—while Europe showed stronger momentum with a 4.3 per cent rise.

The analysis, led by BNP Paribas analyst Kumar Rakesh, examined results from 24 major IT services companies across India, Europe, and the Americas, including 13 Indian firms.

Despite the slower revenue growth, business sentiment appears to be improving. The firm’s outlook index—based on management commentaries—indicates that project delays bottomed out in the June quarter, and companies now have better visibility on deal closures.

Margins improved modestly due to higher productivity, improved utilisation, and reduced attrition.
While headcount rose slightly, productivity gains helped balance cost pressures.

The report also notes that Indian IT companies outperformed global peers in terms of total contract value (TCV) of deals signed during the quarter. Vendor consolidation trends continued, with top clients contributing a growing share of revenue across major firms.

--With inputs from IANS