IT Deal Activity Rebounds; Q2 Wins Surge 26% Amid Demand Pickup

India’s leading software services companies posted a 26% year-on-year increase in total contract value (TCV) in the September 2025 quarter, signalling a clearer recovery in deal signings after an extended period of subdued demand, according to Mirae Asset Sharekhan.

Analysts expect this uptrend to strengthen over the next two years as enterprises ramp up spending on AI-led transformation projects.

BNP Paribas noted that project delays likely bottomed out in Q1 (June quarter), with management commentary across major IT vendors now pointing to improving deal traction. On a sequential basis, sector-wide deal wins rose 2.8%, reversing a sharp 15.2% drop in the previous quarter. HCLTech led the recovery, while Infosys, Mphasis and LTIMindtree reported

softer numbers.

“Barring a significant macro shock, we expect demand to stabilise, followed by a meaningful inflection in CY26 as enterprise budget flushes resume and deferred programs are released,” Mirae Asset Sharekhan said.

On a last-twelve-months (LTM) basis, aggregate deal wins rose 7.8% in Q2FY26, up from 2.3% in the previous quarter, driven by strong LTM TCV growth at Mphasis, Coforge and Wipro. This was partly offset by declines at Infosys, Atos and Accenture.

Nuvama said deal activity has remained steady despite tariff and geopolitical uncertainty, supported by consistent LTM growth. Firms investing in AI-driven solutions to enhance service delivery and secure new contracts stand to gain the most, it added.

Mirae noted that while AI-led productivity improvements may trim some legacy services work, a new cycle of AI-centric and AI-native deals is likely to emerge as a meaningful revenue driver from FY27.

Motilal Oswal also expects companies to post stronger contract wins in application modernisation, data engineering and integration-led projects, helping offset productivity-related deflation alongside AI-led revenue gains in FY27.