New Delhi, Dec. 9 -- After three years of muted growth, the Indian IT services industry is poised for a sharp recovery beginning 2026, driven primarily by accelerating demand for artificial intelligence (AI) services, according to a sector thematic report by HDFC Securities Institutional Equities.

IT firms have transitioned from traditional digital transformation projects toward AI-centric engagements, with AI deals now forming nearly 74% of all contracts signed in the last six quarters, the report said.

Companies such as TCS, Infosys, HCLTech, Wipro, LTIMindtree and Tech Mahindra reported that the majority of their recent contract wins were focused on generative AI, agentic AI, machine learning and AI-led automation.

"The enterprise s...