Shares of India’s leading information technology firms have delivered muted five-year compound annual growth rate (CAGR) returns, as investor concerns over artificial intelligence-driven disruption continue to pressure the sector.
Tata Consultancy Services (TCS), the country’s largest IT exporter, has posted a negative five-year CAGR return of about 1.2 percent, while Infosys has delivered a modest 3.7 percent and Wipro around 1.6 percent. An investment of ₹100 made five years ago in TCS would now be worth roughly ₹94, compared with about ₹120 in Infosys and ₹109 in Wipro. LTIMindtree has fared relatively better with around 6 percent CAGR returns. The Nifty IT index has gained just over 7 percent during the period.
Selling pressure has intensified since early 2025, as investors reassess long-term growth prospects amid rapid advances in AI. Concerns have grown that automation could reduce demand for application development, maintenance, testing, and outsourced business processes—key revenue drivers for Indian IT firms.
Motilal Oswal estimates that 30–40 percent of IT services revenues face AI-driven deflation risk, potentially shaving 2 percent off annual revenue growth over the next few years. Despite near-term challenges, mutual funds continue to hold sizeable stakes in major IT companies, while brokerages remain watchful of emerging AI-native partnerships as a possible medium-term growth catalyst.
Source – Money Control
