AI's impact on IT sector likened to offshore outsourcing shift
Big changes are coming to India's IT scene, thanks to artificial intelligence (AI).
Girish Pai from BOB Capital Markets says this shift could be as major as when companies first started moving work offshore.
While AI promises to shake up how businesses run, there's some worry about what happens beyond FY27—especially for company profits and cash flow.
Pai's cautious approach to IT sector
Pai points out that while AI has huge potential, most companies aren't using it fully yet because it's expensive and tough to scale.
He also warns that industry projections point to 92 million jobs being displaced and 170 million new jobs being created, but the timelines for losses and creation may not align, creating transition risk for IT firms.
For now, he's playing it safe with "hold" ratings on big names like Infosys and TCS, but thinks Firstsource is worth a look because of its better risk-reward balance in these uncertain times.