The decline of the Indian rupee through the first three quarters of FY26 has boosted the reported revenue figures of India’s largest five information technology companies by 4-6%, even as the discretionary spending has remained muted.
The falling rupee has also provided an average of 40-60 basis points of support to operating margins. The Indian rupee has fallen about Rs 4.2 against the US dollar so far in FY26. As most Indian IT companies earn a large portion of their income overseas, particularly in the United States and Europe, this depreciation has inflated rupee-denominated revenue and profit figures in quarterly results.
“For every 1% fall in the rupee, the revenue typically rises by 0.5% and about 10-20 bps rise in the margin. This quarter, the currency depreciation offset furlough impacts too,” said an analyst at a domestic broking firm.
The top five IT companies in India are Tata Consultancy Services (TCS), Infosys, HCLTech, Wipro and Tech Mahindra.
A weak start masked by currency in Q1 FY26
The impact of the falling rupee was most evident at the start of the financial year. In the June quarter, demand conditions remained subdued across global markets, and several firms reported flat or declining revenue when measured in constant currency.
Despite this, reported rupee revenue appeared stronger, as the weaker exchange rate cushioned the impact of slowing volumes. Across the sector, currency movements added roughly 3–4 percentage points to year-on-year reported revenue growth in the first quarter, while also softening quarter-on-quarter declines.
Wipro’s management said during its Q1 FY26 earnings call: “In constant currency terms, we recorded a decline… From an INR perspective, revenue stood higher on a year-on-year basis,” the company said.
Meanwhile, in Q2 reported rupee revenue growth exceeded constant-currency growth by 3–4.5 percentage points year-on-year, while the quarter-on-quarter boost from currency alone was around 2–3 percentage points.
The December quarter was where the gap between reported revenue and underlying growth was the widest. As the rupee weakened further, reported year-on-year revenue growth across the sector increased by around 5–7 percentage points, while quarter-on-quarter growth received a 1.5–2.5 percentage point lift.
Wipro and Tech Mahindra showed the largest divergence between reported rupee growth and constant-currency performance, particularly in the first and third quarters of FY26.
By contrast, HCLTech, which delivered relatively stronger constant-currency growth due to engineering and AI-led deals, showed a smaller relative distortion from currency movements. TCS and Infosys fell between these two extremes, with steady but low single-digit constant-currency growth and a visible forex uplift to headline numbers.
However, to understand the real state of business, both the analyst and the management point investors towards constant-currency performance.
Why constant currency matters
To present a clearer picture of business performance, IT companies report revenue growth in constant currency, which recalculates sales as if exchange rates had remained unchanged from the previous period.
This measure removes the impact of currency fluctuations and reflects actual changes in volumes, pricing and client demand. Across the first three quarters of FY26, constant-currency growth for most large Indian IT firms has remained in the low single digits of 1-2%, even as reported rupee growth appeared far stronger.