AI impact on companies
There was a big selloff in Indian IT stocks last week. The market value of this sector declined by more than Rs 6 lakh crore in eight sessions and the Nifty IT index fell by more than 8%. The fear is that generative and agent-based AI can automate large parts of app creation, maintenance and testing. Till now, this work has been the backbone of earnings of the outsourcing model of Indian IT companies.
Yet aside from the headlines, the picture is not entirely bleak. The country’s big software companies are trying to convince customers and investors that AI will not end the service model. They are already preparing for the uncertain future. The question is whether this preparation will prove sufficient in the face of the huge expenditure on AI by American tech giants or not, time will answer that.
A recent report by JP Morgan said that the current discussion about AI cannot be underestimated, but AI will also create new tasks. This includes updating legacy systems and code, rebuilding custom versions of SaaS where companies want more control, and building reliable AI-based operational services.
Preparation for TCS, Infosys, HCL Tech and Wipro
TCS is emphasizing its large size and reliable delivery. The company wants to become not just a service provider but a complete service provider from infrastructure to AI based solutions. The company has announced a strategic investment in an AI data center with 1 GW capacity to meet sovereign AI needs in India. This step is considered important when there is increasing concern about the security and control of data.
TCS has provided basic GenAI training to more than 3.5 lakh employees and has also conducted a large internal hackathon to promote AI-first thinking. According to analysts, TCS’s annual AI earnings rate is said to be around $1.8 billion. Due to its large capacity and power to implement the work in a systematic manner, it can handle the price pressure better than others. However, much of its AI work is integrated into existing services, not as separate products. Therefore, the benefit of AI can be seen more in efficiency of delivery and winning deals.
Infosys: Topaz platform and agent based model
Infosys is offering a more organized and product-like AI model through its Topaz platform. The company has said that Topaz is increasingly being included in big deals. Additionally, more than 100 GenAI agents have been built for client workflows that automate specific tasks.
According to analysts, Infosys is trying to move beyond a mere manpower-based model to become an enterprise AI partner that offers ready-made frameworks and industry solutions. The company is increasing investment in AI capabilities on the back of good pace of big deals and strong cash flow.
HCL Tech: Focus on engineering and infrastructure based AI
HCL Tech is focusing on AI solutions that work with networks, cloud infrastructure and larger systems. That is, its goal is not just to create a model, but to implement it correctly in a complex system.
The company says that in the world of AI, models alone are not enough. Companies need secure, robust and interconnected systems. HCL’s AI Force platform helps automate tasks like coding, testing and documentation and claims to provide better productivity to clients.
Wipro: Big investment but still a story of change
Wipro plans to spend $1 billion on AI, data and analytics in three years. The company has trained its employees in AI skills and started initiatives like AI360 and Lab45. Additionally, investments are also being made in early-stage AI startups, but they have lagged behind their competitors in terms of growth. According to analysts, Wipro is still a turnaround story, while TCS, Infosys and HCL Tech look more stable and reliable.
Analysts who spoke to ETMarkets say that the real question is not whether AI will come or not, but how it will change the earning model. If AI reduces labor, customers will demand lower prices. In such a situation, companies are trying to move up in the value chain. Where they can charge more for outcomes, platforms and managed AI operations and keep their costs down by using AI internally. The most important thing for investors is whether AI is really helping in winning big deals. Hints of this have started appearing in recent quarterly commentary.
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