Mid-cap IT stocks declined sharply on Wednesday after KPIT Technologies warned of a near-term revenue slowdown. The announcement heightened concerns over the effects of AI on India's software services sector.
The Nifty IT index recorded the largest losses of the day as share prices fell across several companies. KPIT Technologies led the decline with its outlook on revenue growth.
Analysts noted that sustained recovery will depend on stronger demand and the ability of AI tools to offset slower traditional services.
Other mid-cap IT firms including Coforge, Tata Elxsi and Persistent Systems also saw share prices drop amid the broader sell-off.