Kotak Institutional Equities: AI's Dual Role in IT Services Sentiment and Economic Productivity
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AI to Dent IT Services Sentiment, Boost Broader Economy: Kotak Equities
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Moneycontrol•09-03-2026, 05:01
AI to Dent IT Services Sentiment, Boost Broader Economy: Kotak Equities
•Artificial Intelligence (AI) may gradually disrupt India's IT services sector and dampen spending sentiment among tech professionals, says Sanjeev Prasad of Kotak Institutional Equities.
•Uncertainty about job stability could lead IT households to slow discretionary spending and long-term commitments like housing loans.
•Broader employment impact may be limited as IT services employ only 1% of the workforce, but high IT worker income means a slowdown could moderately affect the economy.
•AI can boost overall economy via better credit assessment, pricing, lower NPLs, and enabling more digital initiatives within fixed IT budgets.
•Potential structural shift: IT professionals moving to core engineering or manufacturing, requiring a stronger policy push for manufacturing to leverage AI disruption.
