Companies have emphasised that acquisitions are aimed at “capability-led growth” and “AI-first transformation”, rather than traditional headcount expansion.
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Dado Ruvic
Indian IT services companies have stepped up acquisitions over the past six months, driven less by scale alone and more by the need for skills, specialised capabilities and AI-led transformation. Industry data suggest over $4 billion worth of deals across H2 FY26 alone, spanning more than 10 acquisitions, with a clear tilt toward cloud, data and vertical expertise.
For instance, Tata Consultancy Services (TCS) acquired the US-based Coastal Cloud for about $700 million to deepen Salesforce and AI consulting capabilities, while Wipro agreed to buy Mindsprint in a $375 million deal bundled with a long-term services contract. Infosys, meanwhile, picked up healthcare and consulting assets to strengthen domain depth, and mid-tier players like Coforge have pursued larger, platform-led acquisitions.
The rationale, say industry analysts, is increasingly explicit in management commentary. Companies have emphasised that acquisitions are aimed at “capability-led growth” and “AI-first transformation”, rather than traditional headcount expansion.
According to Ashutosh Sharma, VP & Research Director, Forrester, these IT firms are using acquisitions to fast-track the capability built out.
“The market is evolving rapidly thanks to AI. Acquisitions have become the fastest way to buy time in a market that no longer grants it. Growth has shifted from horizontal IT services to domain depth, cloud-native platforms, AI, data engineering, and industry IP. Building these organically would take too long in a market where clients are consolidating their vendors to a select few and are demanding relevant capabilities that drive ROI for them,” he said.
He added that these acquisitions aren’t simply a response to the slowdown, but instead, companies are trying to bet on where growth will reappear first. While the slowdown over the last few years has made organic growth harder, M&A is more about reshaping future growth than replacing it. Firms are using acquisitions to move toward higher-margin, board-level conversations to offer AI-led transformation, SaaS integration, and industry-specific platforms, where spending is still happening.
different strategy
Meanwhile, Gaurav Vasu, CEO & Founder, UnearthInsight, highlighted that AI is prompting a different M&A strategy. Today, even smaller AI firms command premium valuations — often higher than traditional services firms. Unlike cloud or ERP, AI requires proprietary models, data capabilities, and specialized talent, which is hard to build quickly in-house.
“Enterprises are actively seeking AI-led transformation, pushing IT firms to deepen their AI stack beyond partnerships. As a result, Indian IT is moving beyond incremental tuck-ins toward more deliberate, high-impact AI acquisitions, even if they are fewer in number, because these assets will define competitive positioning over the next decade,” he added.
Infosys MD & CEO Salil Parekh, post the company’s recent acquisition, commented that by bringing together Optimum’s provider experience with Infosys Topaz and Infosys Cobalt, the company is positioned to create a differentiated value proposition for healthcare providers. He also said that the company is comfortable with acquiring in different areas due to strong cash generation.
C Vijayakumar, CEO and MD at HCLTech, in his recent quarterly results commentary, said, ‘Rather than buying a scale, firms are buying missing pieces, which makes it easier to integrate and justify internally and to clients.’
Published on April 26, 2026
