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India IT sector faces slower FY27 growth as AI pressures revenue
BNP Paribas expects large-cap IT services firms to post about 2% year-on-year constant-currency growth in FY27, with median growth below 2% after adjusting for inorganic revenue.
Artificial intelligence adoption is reshaping investor views on India’s IT sector, with BNP Paribas analyst Kumar Rakesh pointing to AI-driven revenue deflation and cautious customer spending.
He said most Indian IT companies are likely to see revenue growth slow in fiscal year 2027 compared with fiscal year 2026, amid weak discretionary budgets and concerns that generative AI could disrupt traditional business models.
Rakesh added that investors should move beyond a simple “AI winners versus losers” framework, because some mid-cap firms may be better positioned than larger peers that are more exposed to AI-driven deflation.
BNP Paribas expects large-cap IT services companies to report close to 2.0% year-on-year constant-currency growth in FY27, though it projects median growth for large-cap firms will land below 2.0% for the year after excluding tailwinds from inorganic revenue contributions.