INDIAN IT STOCKS EMERGE AS SAFE AI TRADE AMID RISING BIG TECH SPENDING ; ANAND RATHI PREFERS TECHM , LTM , MPHASIS

What happened: Anand Rathi said Indian IT stocks could benefit as investors favour asset-light businesses with strong free cash flow amid rising AI capital expenditure by global tech giants. The brokerage prefers Tech Mahindra, LTIMindtree and Mphasis. Key numbers: Hyperscaler capex seen near $730 billion in CY26, up over 80% year-on-year. Why it matters: The brokerage sees attractive risk-reward in Indian IT as capital rotates toward cash-generative firms, but cautioned services revenue growth remains in low single digits and AI-led pricing deflation could constrain growth and margins.

Anand Rathi said Indian IT stocks could benefit as investors favour asset-light businesses with strong free cash flow amid rising AI capital expenditure by global tech giants. The brokerage prefers Tech Mahindra, LTIMindtree and Mphasis.

The brokerage sees attractive risk-reward in Indian IT as capital rotates toward cash-generative firms, but cautioned services revenue growth remains in low single digits and AI-led pricing deflation could constrain growth and margins.