Indian Spacetech Startups Poised for Growth in 2026

“The big theme for 2026, is that there is probably no industry left that is not thinking about AI agents or driving efficiency with AI. The key difference is that companies have moved past the proof-of-concept or pilot mentality to a production mindset. That brings back some old-fashioned considerations, like the cost of the solution. Not everything needs a large language model; some use cases can be handled with small language models. Not everything needs the biggest GPU from Nvidia; some use cases can be supported by older generations of GPUs. As enterprises get more serious about scaling AI across the organisation, cost, openness, and the fact that one size does not fit all are becoming core architecture decisions. That’s why I believe that while last year an MIT report saying that 95% of agentic initiatives would fail went viral, this year similar reports will point to something very different.”

“If we had spoken last year—and we did—I would have said I was concerned. But today, almost all of them have very solid strategies in place. They were slow off the mark, but they’ve caught up. They’re all pursuing what’s being called an asset-led services model. The assets are industry solutions, pre-trained models, and pre-built agents. They’re going to clients and saying, “We can now bring our assets and deliver outcomes as a service.” That puts IT services firms firmly in the middle of the AI economy. Over the next four quarters, their growth rates will look very different from last year.”

“Discretionary spending had taken a step back over the past couple of years, and a bounce-back is expected this year. However, in many cases, this recovery is not being funded through new capital and instead is driven by a rotation of spend between business as usual (BAU) and what is considered new. Much of the large and mega deal activity is focused on compressing BAU costs to create funding for discretionary capital requirements”

“The next financial year is expected to deliver better outcomes than the current one, supported by strong performance in financial services. In energy and utilities as well, we are seeing a healthy pipeline of deals across the vertical, which is helping sustain momentum. We are not seeing any deterioration, which is a positive sign. From a macro perspective, markets are factoring in the possibility of interest rate cuts, particularly in the US, though we will have to see how that plays out. Some of our expansion initiatives, including programmes focused on smaller clients, are performing well. Overall, as we look into the next year, these things support our growth”

“We see strong demand for Gen-AI and Agentic AI across the portfolio, and it is getting embedded in every deal. We also see good demand for advanced AI capabilities like Physical AI and AI Factory, which are well linked to the capex spend in the AI space. While traditional discretionary spending areas have slowed, opportunities are emerging in newer pockets such as establishing and managing AI infrastructure, where discretionary investments continue”