Analysts said sectors with weaker demand and lower discretionary spending remain under pressure.
India’s IT companies saw demand remain strongest in AI-led transformation projects during the June quarter, with BFSI, GCCs, healthcare and engineering-led enterprises driving growth, while North America and Asia Pacific outperformed other regions.At the same time, weakness in consumer-facing sectors, telecom, and parts of manufacturing continued to weigh on discretionary technology spending, analysts said.Among the verticals, BFSI, Global Capability Centres (GCCs), healthcare, manufacturing, and engineering-led enterprises were among the strongest growth drivers, supported by sustained investments in AI, digital engineering, and operational resilience, according to Anuj Agrawal, Founder & CEO of Zyoin Group.However, consumer-facing sectors, retail, and some discretionary spending-driven industries remain relatively cautious as demand recovery continues to be uneven.Cost controlBiswajit Maity, Senior Principal Analyst, Gartner, echoed this, adding, “Consumer/Retail, Telecom, Healthcare, and some Manufacturing segments, especially automotive-related businesses, remained under pressure as clients continued to focus on cost control and delayed discretionary spending decisions. Overall, spending was strongest in industries where AI and transformation initiatives could deliver clear business value and productivity improvements.”Analysts said sectors with weaker demand and lower discretionary spending remain under pressure, particularly where technology investments are driven by near-term business needs instead of long-term transformation.For instance, HCLTech saw some decline in ER&D, Tech and Telecom, Media and Entertainment verticals.“We had some sharp cuts in discretionary spending in two large US telcos, which will have an impact in the subsequent quarters. We’ve had strong momentum in the tech vertical for the last many quarters and in financial services over the last 12 quarters. Y-o-y growth is the highest in the industry, driven by our AI- native approach to many large clients. We also have been more proactive about AI adoption, so we have won significant wallet share in our top customers in financial services,” said CEO and MD C Vijayakumar.The company said its Life Sciences and Healthcare vertical benefited from a healthy mix of engineering services. However, growth was weighed down by stress in the US healthcare market, from which it derives most of its healthcare revenue. Despite these headwinds, the company said it continued to win regular business and execute projects well.North America biggest growth marketRegion-wise, Biswajeet Mahapatra, Principal Analyst, Forrester, noted that North America and Asia Pacific continue to demonstrate the strongest demand resilience, supported by AI investment, cloud adoption, and digital transformation programmes. While Europe remains a growth market, it is more exposed to trade, economic, and geopolitical uncertainties, which have resulted in a more cautious spending environment compared with other major regions.“North America continues to remain the largest growth market despite ongoing macro uncertainties, driven by enterprise AI adoption and digital transformation. India also continues to witness strong momentum through the rapid expansion of GCCs,” Agrawal added.Wipro’s performance remained weak in the Americas during the June quarter, with the region posting declines both sequentially and year-on-year. Americas 1 was flat year-on-year but fell 2.3 per cent sequentially in constant currency (cc), while Americas 2 declined 7.3 per cent year-on-year and 2.5 per cent sequentially cc. Europe grew 6 per cent year-on-year in cc terms but slipped 0.9 per cent sequentially, whereas APMEA was the strongest-performing region, rising 13.5 per cent year-on-year and 4.4 per cent sequentially in constant currency.“We are encouraged by the momentum we continue to see in APMEA, particularly in the BFSI and consumer sectors. Our Europe SMU grew year-on-year with strong traction in BFSI, technology, and communication. However, energy, manufacturing and resources remain soft. We see a healthy pipeline across various regions in Europe such as the UK and Nordics,” CEO and MD Srini Pallia highlighted.Published on July 26, 2026
