In addressing worries that AI might disrupt conventional IT services, Parekh refuted the idea that the industry’s prime era has passed. He remarked: Indian IT “bilkul, bilkul zinda hai” (Absolutely, absolutely it’s alive).
The technology services firm based in Bengaluru is approaching the AI landscape with a solid foundation. Although global clients are mainly concentrating on costs due to a fluctuating macroeconomic backdrop, Parekh anticipates a resurgence in technology spending as economic stability returns, fostering new avenues for AI-driven transformation.
He stated that Infosys has always been confident that businesses will continue to seek technology partners who comprehend their operations, data, and business environments, aiding them in scaling AI effectively.
“We’ve consistently believed that our work with large corporations… necessitates that as they adopt new foundational models, our understanding of the context and the company landscape allows us to provide support,” Parekh noted. “There have been differing external opinions, but we are witnessing a resurgence.”
These remarks arise during a critical phase for Infosys, as Parekh readies to transition to CEO designate Ashiss Kumar Dash, a veteran with three decades at the company. Dash will take over as Managing Director and CEO from April 1, 2027, after Parekh finishes his second term.
Parekh believes this timing is right as Infosys embarks on its next growth chapter. “We have leaders in the market across delivery and all functions, so I feel optimistic that this moment is perfect for the completion of my second term and for a new leader to take charge.”
The stock was trading at ₹1,153.30 at 2:53 pm on the NSE and has fallen over 24% in the past year.
Parekh anticipates AI to play a crucial role in Infosys’ growth over the medium to long term, calling this period “truly the commencement of AI expansion.” AI revenue has risen at a double-digit rate sequentially for several quarters, now constituting over 8% of the company’s standalone business, he added — “already a significant part of our operations.”
The company is engaged in AI agents, application modernization, and coding tools, collaborating with numerous foundation model providers to assist clients in constructing enterprise AI solutions.
For the April–June quarter (Q1FY27), Infosys reported revenues of ₹48,211 crore, while net profit was ₹7,769 crore. The company’s EBIT margin for the quarter stood at 21.1%.
The firm revised its FY27 revenue growth forecast to 1.5%–3% in constant currency from its previous estimate of 1.5%–3.5%. Nevertheless, it retained its FY27 EBIT margin forecast at 20%–22%.
Parekh’s insights come amid a renewed investor interest in Indian IT. The Nifty IT index surged nearly 19% in July — outperforming all 15 Nifty sectoral indices and poised for its most significant monthly outperformance against the benchmark in 13 years — with Infosys shares increasing approximately 15% during the same timeframe.
Brokerage firm Jefferies also believes the recent downturn in AI-related stocks will reverse, potentially providing a tactical uplift to Indian IT shares.
This optimism aligns with a broader trend in enterprise AI investment. Sylvain Duranton, Managing Director and Senior Partner at BCG X, shared with CNBC-TV18 that global AI spending continues to rise despite heightened scrutiny over returns: “The peak is still ahead… I see no signs of hesitation.”
A BCG survey involving 1,800 C-suite executives found that companies plan to double the resources allocated to AI transformation from 2025 to 2026, with 94% of CEOs indicating they would maintain investments even in the absence of anticipated returns.
Duranton also emphasized token costs as a rising concern for businesses, mirroring Parekh’s assertion that clients are increasingly focused on selecting the most suitable AI models for various tasks to enhance efficiency.
The current market capitalization of Infosys is ₹4,67,838.84 crore.
Watch the accompanying video for the complete conversation.
