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Even as Indian IT’s AI ambitions are high, the actual revenue impact is either minimal, delayed, or marred by unclear reporting. Despite substantial investments in GenAI, most firms still discuss deals in the pipeline or projects in the pilot phase.
“Don’t worry about the investments now. Look at the return on investments (ROIs) we can get on the back of it,” HCLTech CEO, C Vijaykumar, said during the Q4FY25 earnings call.
He emphasised the importance of investing in skills development and labs, as well as building use cases. “These efforts should lead to the creation of proof of concepts to present to customers. That’s been our approach, and it’s working well so far,” Vijaykumar said.
In another instance, Sonata Software, led by Samir Dhir, said the company expects AI-enabled services to contribute 20% of its revenue over the next three years, even though the company said AI is part of all deals right now.
During the Q4FY25 earnings call, Dhir said that the firm is pursuing a $34 million pipeline in the AI programme with over 100 clients.
On a cautionary note, Dhir stated that although its clients are adopting generative AI internally, it is not impacting any of their offerings. However, it expects a shift in the next 6-12 months.
AIM wrote earlier that Indian IT might finally see ROI from AI this year, but the declining revenue for larger IT firms suggests that this might not be the case, since most investment went into AI.
Unlike bigger players like TCS, Infosys, and HCLTech, smaller and mid-cap IT firms are taking the lead with AI-led deal wins and greater agility. However, the “invest-now, earn-later” mindset seems to be common across Indian IT.
Even Mid-sized Firms Aren’t Immune
WNS reported Q3 FY25 revenue of $333 million, marking a flat 2.1% YoY growth. Even as the company has doubled down on AI investments for two years, its CEO Keshav Murugesh stated that the company is leveraging AI and GenAI for long-term value creation.
Gautam Singh, head of WNS Analytics, had earlier told AIM that generative AI is already influencing business outcomes. They expect GenAI to impact around 5% of their FY25 revenue. He cited use cases with up to 40% efficiency gains through analytics, AI, and automation.
The company added seven new clients and expanded 52 existing relationships, suggesting growing demand for AI-enabled services even if the returns have yet to kick in.
Similar was the case for Happiest Minds. In Q4 FY25, the firm reported a 30.5% year-on-year jump in revenue led by strong deal momentum in verticals like healthcare and BFSI and growing investments in GenAI.
Happiest Minds Shows the Way
Unlike other firms, bringing transparency on the AI investments and revenues, Happiest Minds reported 2.1% revenue from its newly formed GenAI Business Unit.
While Happiest Minds has taken a lead in disclosing the tangible impact of its GenAI initiatives, most other firms remain vague about AI’s revenue contribution. This includes companies like Persistent Systems and Hexaware, which posted strong revenue growth in recent quarters.
Persistent Systems is targeting $2 billion in annual revenue by FY27. Its managing director, Anand Deshpande, noted that the company’s early bet on Agentic AI drove its current growth.
While these two firms are betting on future gains from AI adoption, others take a more measured approach, signalling a slow shift from experimentation to integration in the longer term.
For instance, LTIMindtree, which posted a 9.9% YoY revenue growth in Q4 FY25, cited AI integration across services as a major factor. CEO Debashis Chatterjee said AI-powered deals helped the company maintain resilience.
In a conversation with AIM earlier, Nachiket Deshpande, the president of LTIMindtree’s AI services, said that LTIMindtree wants to reimagine every service it offers with AI. The company is rolling out solutions to 10,000 customer service agents. “This creates a new revenue opportunity for us as customers invest in these capabilities,” he said. “I predict every single dollar of revenue will have a generative AI component embedded in it.
The company recently also inked a $450 million AI deal with a global agri giant, which will eventually increase the firm’s revenue in the coming months.
Meanwhile, Mphasis, which delivered its strongest sequential growth in three years—2.6% in USD terms, said 59% of its $390 million deal wins were AI-led. CEO Nitin Rakesh stated that AI and tech are now central to its business strategy.
EXL also posted strong first-quarter results for fiscal 2025, with revenue climbing to $501.0 million and adding 10 new clients during the quarter. Chairman and CEO Rohit Kapoor, in a LinkedIn post, said that over 53% of the company’s total revenue in Q1 came from data and AI-led services, a segment that grew 16% year-over-year. It also raised higher guidance for the next year.
Similarly, New Delhi-based IT services firm Coforge signed a $1.5 billion 13-year IT deal with Sabre for AI solutions. The company ended the fourth quarter of FY25 with $2.1 billion in deals.
“Leveraging AI is the big difference driving the significant difference in growth across organisations in today’s real world,” Coforge CEO Sudhir Singh told Moneycontrol.
It seems like Indian IT firms are still in the process of generating revenue from generative AI, which would take at least 2-3 years. This is in contrast to firms like ServiceNow and Accenture which reported generative AI pipeline this quarter and huge revenue from AI services for its clients.
For now, Indian IT is positioning for a long game, banking on AI to become foundational to future service offerings. However, without clear ROI metrics, stakeholders are left to go with optimism and vagueness.
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