Gen AI deflation is a key factor in FY26, but the outlook for FY27 will be important, said experts. (Image: Vijay Sartape/NDTV Profit) Show Quick Read Summary is AI Generated. Newsroom Reviewed

Artificial intelligence could be the biggest opportunity for Indian IT companies, but it is also the biggest risk, according to Kawaljeet Saluja, Senior Executive Director & Head of Research, Kotak Institutional Equities, who cautioned that the industry is entering a three-year 'AI-led deflationary transition', which may have some impact on growth.

“Our view is that there is a transition phase of three years starting FY26, in which the industry growth rate will be impacted by around 2.5% because of AI adoption,” Saluja told NDTV Profit ahead of Q2 earnings season.

Saluja explained that while

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