The recent surge in technology stocks, driven by the artificial intelligence (AI) boom, has left the Indian stock market lagging behind. However, with Indian IT companies making significant investments in AI, the tide may be about to turn. Indian IT stocks are now being touted as a promising opportunity, with some analysts predicting a potential rally in the near future.
Why Indian IT Stocks are a Promising Bet
Indian IT companies, such as TCS, Infosys, and HCL Technologies, have started to invest heavily in AI. TCS, for instance, has generated an annualised $1.5 billion in AI services revenue, marking a 16.3% quarter-on-quarter growth. Meanwhile, Infosys is currently running over 225 generative AI programs through its Topaz platform.
Key Players to Watch
Some of the key players in the Indian IT space that are making significant strides in AI include:
- TCS: With its ambition to become the world’s largest AI-led tech services company
- Infosys: With its Topaz platform and focus on industrialising AI deployment
- HCL Technologies: With its standalone AI revenue of over $100 million in the second quarter of FY26
- Tata Elxsi: With its focus on applied AI for automotive software
- Persistent Systems: With its focus on AI-led engineering and vertical-specific monetisation
Trends to Watch
The Indian IT space is expected to see significant growth in the coming years, driven by the increasing demand for AI-led technology. Some of the key trends to watch include:
- AI-led investments: With tech giants like Amazon and Microsoft pledging $50 billion-plus combined investment in India, AI is set to become a major driver of growth for Indian IT companies
- Resilient margins: Despite macro uncertainties, Indian IT companies are expected to maintain resilient margins, driven by productivity gains from AI platforms and automation
- GenAI and AI engagements: The transition of GenAI and AI engagements from pilot/POC stages to full-scale production deployments is expected to improve deal sizes and revenue visibility for IT vendors
Remember, this is a perspective, not a prediction. It's essential to do your own research and consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.