India IT: The Deal Book Says FY27, The P&L Still Says Wait
A head-analyst read of the FY2025/FY2026 Indian IT macro sector, triangulating Aurific same-store growth, Q3 FY26 results and deal-book commentary, NASSCOM/ICRA/Nomura/Kotak research, and the AI-monetization-versus-AI-deflation debate.
The sector is moving from a discretionary-spend recession to a deal-book-led, AI-gated recovery. FY2025 was the trough-plateau — same-store revenue +7%, EBITDA +8%, margin essentially flat at 21.08% — and Q3 FY26's +10% same-store revenue is the first clear pickup. But this is a bottoming, not a turn: the software core is structurally exposed to AI deflation, and the real acceleration is deferred to FY27 and gated on AI deals scaling, US BFSI budgets reopening on Fed cuts, and the H-1B/tariff overhang not derailing the offshore model.
Generated by AI · Not investment advice. This article is generated by AI and is provided for information only. It is not investment advice or a recommendation to buy, sell, or hold any security. Consult a SEBI-registered investment adviser before acting on it.
Executive Summary
The constructive case is that the worst is behind us and the leading indicators have turned. On Aurific same-store (common-panel) data the IT macro grew revenue +7% in FY25 and a directional +8% in FY26p, with EBITDA +8% and a barely-changed 21.08% EBITDA margin (Δ+0.2pp) — a muted plateau. But the latest reliable quarter, Q3 FY26 (Dec-2025), shows same-store revenue accelerating to +10% YoY, the strongest in the five-quarter sparkline (the exhibit below shows +7% / +7% / +6% / +7% / +10%). That pickup is corroborated by the deal book: TCS booked $9.3bn of TCV, HCLTech reported ~$3bn of new bookings and RAISED its FY26 guidance to 4.0-4.5% cc, and Infosys signed $4.8bn of large-deal TCV (57% net-new). NASSCOM puts the broader tech industry at $315bn in FY26, +6.1% YoY, with AI revenue already $10-12bn.
Members only
Continue reading with Aurific
The full note — snapshot, sector trends, evidence checklist, decision rules and watch list — is available to Aurific members. Sign in to keep reading, or request access.