IT sector: How is AI spending reshaping budgets – Kotak decodes

The IT sector stocks have seen sharp correction and most missed revenue expectations in the recent quarter. The AI-led deflation is becoming a new reality for the IT sector, Kotak Instituitional Equities said.

Kotak maintained a Neutral stance on the sector believing that earlier expectations of recovery by FY27 have been pushed out and growth estimates are now tightly clustered at 1 to 4% across Tier-1 companies.