Economy and AI reshape India IT valuations and FY27 growth
AI is quickly changing how India's IT industry works, with big impacts on company valuations and share-price performance.
According to analyst Kumar Rakesh, both the economy and AI are pushing clients to rethink their spending, which means slower revenue growth for fiscal 2027 compared with FY26.
Interestingly, midsize tech companies are adapting faster to AI, while the biggest players are finding it tougher.
Midcaps benefit as large caps lag
Large-cap IT firms are expected to grow just 2% in fiscal 2027, with inorganic revenue contributions, since switching over to AI-led services is taking time.
Meanwhile, midcap firms are standing out by using AI to drive down costs and win more business.
The whole industry is also moving away from billing by head count toward outcome-based models, but older systems make this a slow process.