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The Economic Times
AI volumes may outweigh revenue deflation for IT sector by FY30: Report
A recent CLSA report suggests that while the IT sector in India is currently experiencing revenue challenges due to weaker economic conditions, it also projects that AI volumes will outpace this revenue deflation by fiscal year 2030. The report notes multiple macroeconomic headwinds but asserts that AI will create substantial future growth opportunities, with investment in AI technologies set to expand significantly. Despite the immediate pressures on revenue, CLSA believes AI will propel the sector's growth trajectory in the long run and predicts a rebound in mid to high single-digit growth by FY31 as the demand for AI-related services accelerates over the next few years.
MonitorConfidence: MediumMid term horizon
Published 22 Aug 2026, 12:30 UTC4 min read
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Summary
TL;DR
- CLSA predicts AI volumes will outweigh revenue deflation by FY30.
- Current growth in the IT industry is constrained by macroeconomic factors.
- AI spending expected to double its share of IT services by 2029.
- Healthy order-book growth reported by most companies.
- Risk of losing AI spending to hardware/software services highlighted.
Interesting facts
- AI could compress revenues initially as productivity gains are passed to clients.
- AI-driven demand's ability to offset revenue declines is under scrutiny.