HOME-GROWN IT major Infosys has killed any speculation about a change at the top with plenty of time to spare. With still nine months to go for the end of current CEO and MD Salil Parekh’s term, Infosys has announced who will succeed him. On July 23, it elevated veteran Ashiss Kumar Dash as the next CEO. Infosys chairman Nandan Nilekani, while announcing the succession plan, called Dash — who has spent over three decades at the company — a true-blue ‘Infoscion’ and an uncomplicated guy who focusses on what needs to be done.

Currently EVP & global head, services, utilities, resources, energy & enterprise sustainability, Dash has spent the better part of his career in the U.S. Endorsing his previous experience in several roles at the company as his strengths, Nilekani said at the press conference, “He has worked in every part of Infosys, be it in delivery, be it in sales, be it in account management, starting a new DC in Bhubaneswar, everything. He’s someone who I think everybody likes, respects.”

Dash is expected to relocate to India shortly and start working with Parekh on the transition starting this October, even as he readies to assume the corner office on April 1, 2027. This is in stark contrast to the circumstances in which Dash’s predecessor assumed office. Parekh’s appointment was preceded by the exit of Vishal Sikka, the first external and non-founder CEO Infosys had appointed in 2014, before the end of his term, after he fell out with the founders.

His resignation caused the company’s stock to plunge over 10%, with the share price hitting a multi-year low — possibly the first time in the company’s history that its leadership had been a cause of concern for investors. Though the company announced then COO U.B. Pravin Rao as the interim CEO, it was not until December that year that Infosys announced Capgemini veteran Parekh as its next CEO.

After taking over in January 2018 (when Infosys’ annual revenue was just short of $11 billion), Parekh, besides bringing in the much-needed stability with his measured approach, navigated the pandemic during his first term (2018-2023), while riding the 2022 boom year to clock growth of 20% year-on-year. His second term (2023-2027) has seen him focus on the company’s blueprint for AI. Under Parekh — who kept pushing the needle on large deals — Infosys added nearly $10 billion in incremental revenue, and crossed the milestone of $20 billion in annual revenue in FY26.

Cautiously optimistic

The succession plan comes on the back of Infosys cutting the upper end of its growth guidance. It revised its FY27 constant currency (CC) revenue growth guidance to 1.5-3% from the earlier 1.5-3.5%, but maintained its EBIT margin guidance at 20-22%. This comes on the back of softening demand, selective spending by clients, and macro- and client-specific issues — that Dash will have to deal with after he takes over.  

The mood is no different for its peers. Q1FY27 remained non-eventful with most Indian IT companies remaining cautiously optimistic about growth for FY27. HCLTech, the only other large-cap IT firm that provides annual growth guidance to its investors, has retained its CC revenue growth guidance of 1-4% for the fiscal and services revenue growth guidance of 1.5-4.5%. It has also maintained EBIT margin guidance of 17.5-18.5%. At its earnings call, CEO and MD C. Vijayakumar said the macro-related situation was no different from where it was in March, and hence the guidance for now stands the same.

TCS, India’s largest IT firm by revenues, also echoed similar sentiments. CEO and MD K. Krithivasan said that while the geopolitical uncertainties increased around March, the sentiment carried through Q1FY27. Though TCS saw a few clients defer their decisions, it is optimistic about Q2. “We are still optimistic that the demand will resume at some time in Q2, primarily because our customers have a significant amount of pent-up technology backlog to be completed,” Krithivasan said during its earnings call.

Biswajeet Mahapatra, principal analyst at Forrester, says for technology buyers what seems to be a clear focus is prioritising projects with measurable business outcomes, cost reduction, productivity improvement, and operational resilience. Demand remains stable but highly selective.

That said, the AI component of revenue for all firms has seen exponential growth. For instance, TCS saw its annualised AI revenue hit $2.6 billion in Q1FY27, up 13.6% QoQ; for HCLTech, the sequential growth rate of its advanced AI revenue was 10.6%. “Enterprises continue to invest in AI, data modernisation, cybersecurity, cloud optimisation, and technology modernisation initiatives, while discretionary spending on large-scale transformation programmes remains constrained,” Mahapatra says.

IT firms also highlighted the softness in discretionary spending. During its earnings call, LTM CEO and MD Venu Lambu said while discretionary spend is “not back to its full glory”, the expectation is that it will get better in the second half of the year. Wipro, which saw sequential revenue decline of 1.4% this quarter — the sharpest among its peers — has also provided weak guidance for Q2FY27, in the range of -1.5-0.5% in CC terms. The CEO and MD Srini Pallia, at the analyst call, said, “Discretionary spend has been slower, and some of the decision-making has been slower, but we think it will come back.”

However, Crisil Ratings’ latest report on the Indian IT sector expects growth during FY27 to remain muted. The sector is expected to clock around 1-3% on the back of AI-driven disruptions, weak discretionary spending, and continuing geopolitical uncertainties.