20 hrs ago

Nirmal Bang Flags AI Pressure, Sets IT Stock Targets

Nirmal Bang studied several technology companies and gave them ratings and price targets.

It believes artificial intelligence could help companies do software work with fewer people.

That could reduce the number of hours IT companies can bill clients for.

Clients may also ask for lower prices because AI makes work faster.

The brokerage thinks large IT companies could face more pressure because they have more older business to protect.

Smaller companies such as Coforge may be more flexible and may win AI-related work.

Nirmal Bang rated six companies as “sell” and three as “hold.”

It also warned that either very fast or very slow AI adoption could create problems for IT budgets.

Key facts

Sector view: Underweight on IT services
Sell-rated stocks: TCS, Infosys, Wipro, HCL Tech, Tech Mahindra and LTM
Hold-rated stocks: Coforge, Persistent Systems and Mphasis
Large-cap headcount growth: Employee headcount rose 0.1% on average, according to Nirmal Bang
Developer productivity estimate: Developer throughput could increase 5-8 times
Potential pricing pressure: Clients may build about 20% pricing compression into technology budgets
AI model growth cited: OpenAI revenue was cited at US$6.7 billion, up 130% year on year; Anthropic revenue at US$11.5 billion, up 1,300% year on year
FY27 risk assessment: Large-cap IT companies are expected to face greater pressure than mid-cap firms

businesstoday.in · 1 day ago