INDIAN IT SECTOR: THE AI ASCENSION The Indian IT sector is currently navigating a pivotal transition from legacy service models to an AI-first paradigm. Despite short-term market volatility that wiped nearly 5 trillion rupees off the sector's market capitalization earlier this year, the industry is showing significant resilience. Analysts now point toward an "undervaluation" phase, with the Nifty IT index trading at a price-to-earnings ratio of 23x—notably below its 5-year median of 29.6x. Recent performance data signals a constructive recovery. Revenue growth for major large-cap firms has begun exceeding market expectations, with street estimates for the upcoming fiscal year projected between 5% and 8%. The industry is on a clear trajectory to hit the 300 billion dollar revenue milestone by FY2026. This growth is increasingly fueled by high-value, AI-driven deals rather than traditional maintenance contracts. Artificial Intelligence is no longer a peripheral experiment but a core revenue driver. Major players like TCS and HCL Tech have reported AI service revenues growing by nearly 20% on a quarter-on-quarter basis. TCS alone has reached an annualized AI revenue run rate of 1.8 billion dollars. The strategy has shifted from "effort-based" billable hours to "outcome-oriented" engagements, where human intelligence is augmented by agentic AI platforms. Workforce dynamics are undergoing a massive transformation to match this technical shift. India now ranks 3rd globally in AI vibrancy, with a talent pool reskilling at 2.5 times the global average. Large-cap firms have already trained hundreds of thousands of associates in advanced AI skills. While overall headcount growth remains measured, the demand for specialized roles in cloud, cybersecurity, and platform engineering has driven a 16% jump in IT job demand compared to the previous year. Valuations remain a focal point for investors as the sector pivots. While some stocks faced pressure due to concerns over AI cannibalizing traditional business, recent strategic partnerships—such as Infosys collaborating with Anthropic—have restored confidence. The emergence of Global Capability Centers (GCCs) as innovation hubs further strengthens the ecosystem, with their share of talent demand rising to approximately 27%. The sector’s robust business models are being structurally redesigned to reduce delivery bottlenecks. With the digital economy now contributing an estimated 12% to India's GDP, the IT industry is repositioning itself from a cost-effective outsourcing destination to a global leader in trusted, innovation-driven digital services. [Indian IT Sector Outlook](https://www.youtube.com/watch?v=yzQ_5pcVxsw) This video provides a detailed breakdown of the recent Q3 earnings for major Indian IT firms, highlighting the specific revenue growth coming from AI and the stabilization of guidance for the upcoming fiscal year. http://googleusercontent.com/youtube_content/0