Indian IT Services: The AI Shift – Analyzed

Key Points

• AI is changing IT services, not just technology.
• Companies are starting to use AI to help solve business problems.
• IT companies are preparing for a big boost in demand for AI services.
• Some companies will do better than others as AI becomes more common.
• Experts think the best time to invest is now, before everyone knows it.
• IT services are expected to grow rapidly over the next few years because of AI.

The world of computer services is changing fast. Companies like HCLTech and Tech Mahindra are betting that artificial intelligence (AI) will be the next big thing. Many companies are still worried about whether IT services will get better, but early signs show that AI is starting to help businesses in a new way.

Think of AI like a really smart assistant that can help companies do their work more efficiently. Instead of just fixing computers, IT companies will now be helping businesses use AI to make better decisions, improve processes, and create new products. This is a big change, and it’s happening now.

Motilal Oswal, a group of financial experts, believes that companies like HCLTech and Tech Mahindra will do particularly well as AI becomes more popular. They’ve picked Hexaware and Coforge as good options too. They think some companies will be better than others at using AI.

Here’s how they think things will play out over time: First, in the next few months, things might still be tough with fewer budgets and workers being laid off. But then, starting around March or April of 2026, things will start to change as companies plan their spending for the new year.

After that, in about two years, companies will start using AI to handle bigger projects, which will bring in more money. By 2028, AI will be everywhere, and IT services will grow quickly. This could mean that some companies will see a big increase in their profits.

Some of the bigger companies, like HCLTech, are good at handling complex projects, so they are likely to do well. Smaller companies with specialized knowledge can also do well, especially if they can partner with the big companies.

Motilal Oswal thinks the best time to invest is now because they believe AI will drive a major recovery in the IT services industry. They are upgrading their estimates to reflect this change, expecting growth to start in 2027 and fully take shape by 2028.

“The key to unlocking the AI opportunity is to buy now, while valuations are still low.” – Motilal Oswal.