Anthropic’s AI push raises analyst concerns over Indian IT services revenues
BNN Bloomberg
Rapid advances in artificial intelligence, triggered in part by Anthropic’s latest automation push, could structurally erode the IT sector’s high-margin application services revenues, creating downside risks to earnings and valuations, analysts warn.
Shares in India’s software exporters settled 0.6 per cent lower on Thursday, a day after plunging 6 per cent in their worst session for nearly six years, as AI-driven automation from U.S.-based Anthropic and Palantir fueled fears of compressed project timelines and disruption to the industry’s labor-intensive business model.
The weakness has echoed across global IT stocks this week, extending a broader selloff in companies seen as most exposed to potential AI disruption.
“There is more pain ahead for Indian IT,” Jefferies said, adding that Anthropic’s and Palantir’s claims highlight how AI could potentially erode application service revenues for IT firms.
“With application services accounting for 40–70 per cent of revenues, firms face growth pressures, and consensus growth estimates do not fully reflect this, posing downside risks to valuations.”
Indian IT firms have been ramping up AI investments and re-skilling efforts, even as weak global tech spending, delayed client decision-making and pricing pressure have weighed on the sector. Foreign investors offloaded a record $8.5 billion worth of Indian IT stocks in 2025.
