Indian IT seems to be hopping onto the generative AI bandwagon lately. Amid weak Q4 results, leading players like TCS, Infosys, HCLTech, and Wipro have been quick to claim that AI is now integral to every client conversation and all major deals. 

Despite these bold claims, they seem to be wary of directly disclosing GenAI revenue from any deals. This raises questions over whether these companies are merely ‘AI washing’ or creating actual value for the clients.

‘AI washing’ refers to vague and overstated claims around AI adoption, lacking measurable outcomes. The Q4 earnings have thrown this into sharp focus. 

In contrast to Indian IT, global IT giant Accenture, which operates in a similar market, revealed that its generative AI bookings reached $1.4 billion in Q2 FY25, up from $1.2 billion in the previous quarter. This, despite the company reporting a 5.8% QoQ decline in revenue, while reporting a 5.4% increase YoY. Generative AI comprised 6.7% of Accenture’s total order bookings of $20.9 billion. 

‘AI is Now Part of Every Deal Conversation’ 

Among the Indian tech giants, TCS reported $7.4 billion in revenue in Q4 FY25, a 0.8% sequential rise and 5.3% YoY growth. The company announced record-high deal wins of $12.2 billion, up from $10.2 billion in the previous quarter. CEO and MD K Krithivasan claimed that AI was now part of every deal. 

Expertise in AI and digital innovation enabled TCS to invest in an agent-based AI form, with over 150 solutions across various verticals for its clients. 

Despite this, the company did not disclose direct revenue from GenAI. This is a departure from Q1FY25, when the company reported a generative AI pipeline of $1.5 billion, suggesting early traction that had since failed to convert into topline growth.

Infosys and Wipro in Deep Waters

Infosys, meanwhile, posted $4.7 billion in Q4 revenue, down 4.2% QoQ in USD terms. CEO Salil Parekh demonstrated enthusiasm for generative AI despite the weak quarter. He said the company is leading in AI agents, similar to TCS, and working on over 400 generative AI projects. 

That said, despite a ramp-up from just 100 projects in the previous quarter, Infosys also declined to give any AI-related revenue figures. In the last quarter, Parekh distanced Infosys from ‘AI washing’ claims. 

Infosys closed FY25 with a negative 4.2% revenue growth in USD QoQ at $4.7 billion.

Its peer, Wipro, echoed a similar stance. CEO Srini Pallia said all 17 deals signed in Q4, worth $1.8 billion, included generative AI components. For the full year, the company reported that it closed 63 large deals, totalling $5.4 billion, representing 17.5% year-over-year growth. 

Wipro has forecast a decline of up to 3.5% in Q1 FY26, signalling more headwinds despite its AI narrative.

Yet, like its peers, Wipro has kept away from directly quantifying revenue tied to AI. When asked about the cannibalisation of deals due to generative AI, Pallia, during the company’s earnings call earlier this month, stated that Wipro is now incorporating generative AI into all its solutions. 

“GenAI was not part of the earlier deals, but in all the new deals, we’re going to infuse it,” Pallia said. For the year ending March 31, Wipro reported gross revenue of $10.4 billion, reflecting a 0.7% decline year-over-year. However, net income for the year rose by 19% to $1.5 billion. 

Looking ahead, Wipro further anticipates Q1 FY26 revenue to fall between $2.505 million and $2.557 million, indicating a projected decline of 1.5% to 3.5%. 

HCLTech & Tech Mahindra to Save the Day?

HCL, with a market capitalisation of roughly a third of TCS’ and two-thirds that of Infosys, announced 12 generative AI-focused deals and highlighted its 500 GenAI engagements across 400 clients through its AI Labs. 

The company’s Q4 revenue stood at $3.4 billion, down 1% QoQ, and deal bookings were at $3 billion, taking FY25 total to $9.26 billion—a 5% drop from the previous year. 

HCLTech focused on exclusive AI and generative AI deals, securing 12 new agreements, including those involving agentic AI and automation processes, for the quarter. This announcement differs from other IT firms that shied away from mentioning AI-specific deals. 

CEO C Vijaykumar maintained a longer-term perspective. He noted that the company’s AI investments will yield returns over time. “Don’t worry about the investments now—look at the ROIs we can get on the back of it,” he said. 

Also, Tech Mahindra, the firm behind the creator of Project Indus, India’s first Indic LLM, posted flat revenue growth for the quarter.  However, it recorded a 77% rise in profit.

Speaking on the company’s generative AI strategy, Mohit Joshi, CEO and MD, shared that the company is formally unveiling its “AI delivered right” approach. “AI is now woven into the fabric of our data and engineering service lines,” he said. “It’s not siloed anymore. The vast majority of our clients are already leveraging some form of our AI offerings.”

Similar to the others, with revenue growth faltering, the integration of AI in the deals did not add any immediate value.

Meanwhile, LTIMindtree did not disclose any information about AI, apart from its past partnerships. CEO and MD Debashis Chatterjee said that the revenue was driven by a significant array of AI-led deal wins. “[It] illustrates the pervasive integration of AI across our service offerings,” he said.

Surprisingly, LTIMindtree reported significantly better revenue compared to its larger peers in Indian IT. The company’s revenue stood at ₹9,771.7 crore for the quarter ended March 31, reflecting a 1.1% sequential growth and a 9.9% rise year-on-year.

AI Washing to AI Washout

Speaking at an industry event in Mumbai in February, HCLTech’s Vijayakumar pointed out that it was time for Indian IT to rethink its 30-year-old business model or risk becoming obsolete. AI was seen to steer the path ahead for them to remain relevant in the race. Infosys’ Parekh echoed this “paranoia” and called for a non-complacent approach.

Now, generative AI is expected to accelerate software development by automating coding and reducing project timelines. 

Last week, Zoho co-founder Sridhar Vembu raised red flags about the state of India’s IT services industry. He responded to a comment on the dismal Q4 earnings from top IT firms, calling it a “total washout”. He pointed out that there are deep-rooted inefficiencies and structural flaws that go beyond short-term market cycles or AI.

Vembu also noted that Indian IT’s 30-year-old business model is at a pivotal juncture. “We have to challenge our assumptions and do fresh thinking.”

Meanwhile, CP Gurnani, former CEO of TechMahindra, believes that this is recoverable. “The pain is temporary,” he wrote in a LinkedIn post. Taking the example of COVID, Gurnani said that certainly there is an inflexion point, but “Indian IT giants have constantly moved up the value chain all through the course of their storied existence.”

This quarter is supposed to be a wake-up call for Indian IT following the Accenture results, but clearly AI has taken the spotlight with a long shadow over the firms.

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