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The good, bad and ugly: Decoding the IT pack’s Q4 show

Livemint · 6m

India's information technology (IT) sector is facing challenges as growth headwinds in the West and generative artificial intelligence (GenAI) disrupt the industry. However, despite the uncertain macroeconomic conditions, IT companies have reported robust deal wins, particularly in key industry verticals and geographies. Operational metrics, such as reduced subcontracting costs and increased efficiency, have also given a boost to companies' margins. Indian IT firms are embracing AI and investing heavily in it. On the downside, the demand environment remains uncertain due to macroeconomic turbulence in the US and Europe, with the banking and financial services industry experiencing downtrends. Job cuts and automation concerns are also affecting the sector. Despite these challenges, some experts recommend considering long-term investments in large-cap IT stocks.