AI to create a ‘Double-edge impact’ for IT sector: Axis Securities says AI spending Vs pricing pressure key challenge ahead

The IT sector continues to be in the eye of the storm and the mixed performance in Q1 has kept the spotlight on the sector. The midcaps have outperformed the large caps in the current quarter amid geopolitical and AI-led challenges. While the near-term uncertainties are expected to continue in the coming quarters, Axis Securities says that AI can create “a double-edged impact” on the IT sector.

That said, the brokerage firm remains positive on the long-term outlook for Indian IT services.“The long-term outlook remains robust, supported by operational efficiencies, AI-led deal wins and broader economic recovery,” Axis Securities noted.