Indian I.T. Stocks Face AI Disruption: Why Growth, Margins And PE Multiples May Fall

Despite the recent rally in I.T. stocks, the long-term outlook for the sector remains a subject of debate. Abhay Agarwal, Founder and Fund Manager, Piper Serica, believes Indian and global I.T. services companies continue to face weak growth prospects as artificial intelligence reshapes the industry. He argues that I.T. firms may increasingly become system integrators rather than innovation leaders, potentially leading to lower margins and valuations over time. While these companies are likely to remain profitable and generate steady cash flows, Agarwal does not view them as compelling growth opportunities.