India IT Giants Post Solid Profits but Miss Targets as AI Reshapes Pricing

India's major IT services firms, including Infosys, TCS, Wipro, and HCLTech, reported modest growth this quarter but fell short of market expectations, sending share prices lower. Infosys posted a 12% rise in net profit and 14% revenue growth for Q1 FY2027, yet trimmed its full-year dollar revenue growth outlook to a 1.5–3% range. Large deal pipelines remain active, but clients are delaying project starts and renegotiating contract structures as AI tools reduce the labour hours needed to deliver the same outcomes. AI-related revenue, while growing, still accounts for only around 8.2% of Infosys's sales and is too small to offset the deflationary pressure on traditional manpower-based delivery contracts. Analysts note the core tension is structural: the industry's decades-old model of billing by person-hours is being disrupted by clients who now measure value by unit delivery cost and automation outcomes.