AI winners and losers are emerging in Indian IT, says BNP’s Kumar Rakesh
AI Summary
The evolving landscape of AI adoption is creating a bifurcation in the Indian IT sector, with mid-cap firms like Persistent Systems potentially emerging as key beneficiaries while larger players face challenges due to their legacy services. Retail investors should be cautious, as the anticipated slowdown in revenue growth for FY27 could impact valuations, particularly for large-cap companies. This trend underscores the importance of a selective investment approach, focusing on firms that are agile in adapting to technological changes.
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MUMBAI: The rapid evolution and adoption of artificial intelligence (AI) are reshaping the narrative, valuations and share-price performance of India’s IT sector. Against the backdrop of cautious client spending and weak discretionary budgets, most IT companies are likely to see revenue growth slow in fiscal year 2027 (FY27) from FY26, according to Kumar Rakesh, India analyst - IT and auto at BNP Paribas.
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