AI Wave Leaves Indian IT Behind: Tough Road Ahead
AI Wave Leaves Indian IT Behind: Tough Road Ahead
Market expert cautions that AI-driven delivery models are reshaping Indian IT as margins tighten, with niche players poised for growth in travel tech and EV transitions.
Market expert Sudip Bandyopadhyay warns that the Indian IT industry is facing structural headwinds as the world shifts to AI-driven delivery models. The immediate mood is cautious: buybacks and cash reserves offer relief, but fundamentals are weakening, and margins are at risk.
He notes that margins could compress as pricing power wanes and revenue growth remains in the low single digits, especially for large IT services players. The absence of major proprietary AI products has left India behind the AI rally in peers, reducing export growth potential.
Yet there are bright spots. Niche IT firms tied to travel and tourism, and those supporting the ICE-to-EV transition — such as Tata Technologies — could see stronger demand as specialization and domain expertise matter more in an AI-first world.
His advice: be selective, not broad-based in IT exposure. Investors should focus on firms with real AI capabilities or sector-specific strengths rather than chasing the entire IT sector.
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