Brokerage: AI spending shift squeezes India's IT growth until FY2027
Business
India's IT industry is hitting a rough patch as more companies shift their budgets from traditional services to AI tech like GPUs and foundation models.
This move is squeezing prices and slowing down revenue growth, with the brokerage report saying no meaningful recovery is in sight for FY2027.
AI price cuts 3.5% hurt margins
AI-driven price drops, about 3.5%, are making contract renewals tougher and cutting into profit margins.
As top players like TCS and Tech Mahindra compete for similar deals, the market isn't growing fast enough to balance out all this new AI spending.
Still, there's hope: the report suggests these challenges are part of a cycle, and midtier firms (like PSYS) might find fresh opportunities in areas like AI governance.