Indian IT sees rising share of revenue from BFSI in FY26

After a dip in FY25, the proportion of revenue coming from Banking, Financial Services and Insurance (BFSI) has risen for Indian IT service firms.

Four of the five leading Indian IT services providers reported a higher share of BFSI revenue in FY26, based on their annual reports.

Speaking with businessline, experts note that the rise in BFSI contribution stems from both absolute growth fueled by modernization and AI initiatives and from declines in other sectors such as technology, telecom, manufacturing and retail.

In FY26, BFSI represented 32 % of TCS’s total revenue, up from 30.9 % in FY25. Likewise, HCLTech’s BFSI share increased to 21.5 % from 20.7 % the prior year.

For Infosys, the BFSI portion grew modestly from 27.7 % to 28 %, while Tech Mahindra saw it rise from 16.1 % to 16.3 %. Wipro bucked the trend, slipping from 34.3 % to 34.1 %.

In absolute terms, these firms recorded a 1 %–7.5 % year‑on‑year increase in BFSI revenue in FY26 versus FY25, except Wipro, which experienced a 0.7 % decline.

Vivek Iyer, Partner and Financial Services Risk Leader at Grant Thornton Bharat, observes that banks and financial institutions deploy AI and technology mainly to achieve core productivity gains rather than discretionary innovation, rendering the segment comparatively resistant during macro‑economic stress.

He adds, “Currency depreciation also enhances the cost competitiveness of Indian IT vendors, likely bolstering outsourcing demand from global BFSI clients through FY27.”

Pushpa Marwal, an analyst at Forrester, attributes the trend partly to weakness in other verticals. “Although the BFSI share is rising, part of that increase reflects contraction or stagnation elsewhere. In such an environment BFSI appears stronger without needing to do much,” she says.

She cautions against dismissing the growth entirely, noting that BFSI has shown genuine recovery in absolute terms. “Some of the gains are earned, while others simply reflect underperformance in other sectors.”

Marwal also points out that current contracts are largely necessity‑driven backlog clearance from previous years, which has a limit compared with larger transformation deals.

The BFSI sector has additionally shown resilience owing to strong AI adoption by banks and financial services firms.

A Kotak Institutional Equities report indicates that in banking many AI projects are moving from pilot to production. The report warns, however, that over the long run AI could generate revenue deflation as banks reap productivity gains in areas like application development and customer service, reducing billable effort for IT service providers.

During the earnings call following TCS’s Q4FY26 results, K. Krithivasan, Chief Executive Officer and Managing Director, said that despite heightened macro‑economic uncertainty prompting cautious investment decisions, BFSI clients continued to prioritize core and legacy modernization alongside AI/GenAI initiatives.

Looking ahead to FY27, Gaurav Vasu, co‑founder of UnearthInsight, suggests that because most BFSI spending is non‑discretionary, the vertical is likely to remain more resilient than most other sectors.

(With Inputs from BL Intern G. Mahalakshmi)

Published on June 8, 2026