AI-driven pricing pressure, cost cuts reshape India IT outlook: Report
Artificial intelligence (AI) is increasingly reshaping the growth and margin outlook for India’s IT services sector, with firms facing rising pricing pressure even as new demand opportunities emerge, according to a recent sector report by Kotak Institutional Equities.
The report flags higher competitive intensity amid demand and AI headwinds, noting that AI-led productivity gains are now being passed on to clients, resulting in what it terms “AI-deflation.”
It adds that industry players indicate “pricing pressure in renewals due to client expectations of higher productivity pass-through driven by GenAI adoption,” alongside intensified competition.
