Indian IT giants Tata Consultancy Services (TCS) and Wipro are grappling with revenue declines despite healthy deal pipelines. TCS reported a 2.4% drop in annual revenue for FY26, while Wipro experienced a 1.6% decline, marking its third consecutive year of revenue loss. Both companies, however, saw growth in their total contract values, with TCS at $40.7 billion (up 3.2% year-on-year) and Wipro at $16.4 billion (up 14% year-on-year). Analysts attribute the revenue drops to significant discounts offered in a competitive landscape influenced by AI, which offsets productivity gains. Akshat Vaid from Everest Group noted that firms are compelled to offer discounts to avoid losing contracts, leading to revenue cannibalization. Additionally, a 20% contraction in application development and management contracts has further strained revenue streams. The cautious approach of clients towards AI pricing is causing delays in contract signings, which contributes to slower revenue conversions.