Concerns around artificial intelligence disrupting traditional technology services have kept investors cautious on Indian IT stocks over the past year. Weak discretionary spending, slower global demand and muted earnings growth have further weighed on sentiment. However, veteran fund managers Rajeev Thakkar of PPFAS Mutual Fund and Sankaran Naren of ICICI Prudential Mutual Fund believe parts of the sector are beginning to look attractive again.

Speaking at the Groww India Investor Festival 2026 in Mumbai during a session titled The Art of Not Losing Money, the two fund managers shared their views on the changing IT landscape and whether AI could fundamentally alter the future of Indian software services companies. Both fund managers said that they are finding opportunities in IT even as broader sentiment towards the sector remains cautious.

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Veteran fund manager Sankaran Naren described the current setup in the IT sector as a “contrarian valuation call”, though he acknowledged that the industry still faces genuine disruption risks from AI.

“It is a contrarian valuation call. But whether it is a value trap, that is not clear,” Naren said at the event.

According to him, markets have sharply de-rated IT companies because investors fear that AI could reduce demand for traditional coding and software services. However, he said it is still unclear whether the sector is facing a structural disruption or merely a cyclical slowdown linked to changing global spending priorities.
“We are grappling with whether this is a value trap because of disruption, or a cyclical slowdown because of what is happening with AI capex. We are still doing the work,” he added.Naren also pointed out that if AI-led disruption becomes severe enough, the impact may not remain restricted to IT services alone.

“If AI is truly disruptive, several sectors will get disrupted. But the market is selectively punishing IT,” he said, while noting that allocations to the sector among mutual funds remain relatively low.

Rajeev Thakkar, on the other hand, highlighted how Indian IT companies have repeatedly navigated major technological shifts over the last three decades.

“In the late 1990s, people thought these companies were only about Y2K. Then came the dotcom crash. Later during the SaaS wave, people questioned why clients would even need IT services companies,” he said.

According to Thakkar, the industry has historically adapted to disruptions rather than getting displaced by them.

“People are now saying this time it is different, that AI is replacing developer work and there may not be enough work to go around,” he said.

However, Thakkar argued that AI-driven productivity may ultimately expand demand rather than shrink it. Referring to the economic principle known as Jevons’ Paradox, he explained that lower costs often lead to higher overall consumption.

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“If 10 people can now do the work of 50, costs come down. But lower costs can also increase usage and demand,” he said.

He drew parallels with industries such as telecom and discount broking, where falling costs eventually expanded customer adoption and overall market size.

Despite their constructive stance, both fund managers maintained that their outlook remains dynamic and dependent on how the AI narrative evolves globally.

“As of now, that is the base case. But as Naren said, we will have to keep re-evaluating,” Thakkar added.

The broader discussion focused on risk management, capital preservation and disciplined investing, but the relatively optimistic view on IT stood out at a time when the sector remains largely out of favour among investors.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)

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The global data centre specialist says demand is expected to continue in its key market

Profits and staff numbers have both grown significantly at Tyneside-based Black and White Engineering, new accounts show.

The Newcastle firm, which has operations around the world, says the global data centre market – its key focus – is expanding at pace and with all signs pointing to more activity in the years to come. Black and White saw its turnover rise from £36m to £55.8m in the year to the end of October 2025, with operating profits soaring from £2.2m to £7.7m.

It follows significant expansion for the firm, which last year acquired Irish consulting engineering business Homan O’Brien, and upgraded offices in Dubai, London and Singapore, as well as opening an outpost in Frankfurt. That has meant Black and White’s workforce has grown by 51% to 236.

A breakdown of the year’s turnover shows most was derived from work in the UK and Europe. With more than 100 staff in the UAE, and a number of key portfolio projects in the Middle East, the firm said it had followed advice from the UAE government and was working from home with no issues reported as a result of the Iran conflict.

Writing in the accounts, director Steven Horn said the business is on track to meet long term goals and targets. He said: “We are making continued progress with our investments in people and infrastructure, continuing the enhancement of our systems and teams in IT, human resources and finance. The B&W expansion into new areas such as civil structural engineering, design management as well as a number of other specialist areas continues at pace and will continue in the years to come.

“Our current business performance year to date suggests we will continue to meet our global revenue targets and business initiatives .Global expansion continues with an office opened in Frankfurt in the year with Dubai, London and Singapore all moving to larger offices. B&W entered Ireland through the acquisition of Homan O’Brien, a highly regarded Dublin-based MEP consultant in March 2025.

“That business is now fully integrated, growing and focused on data centre projects and clients as part of the one global team. We continue to set up new business entities to meet our ability to trade in multiple countries across the globe, following key clients.”

Mr Horn added: “Our brand and technical offering continues to evolve and is very well received in the market place. This is the direct result of our people, our delivery model, quality of product and client-focused approach. Our aim is to be the datacentre consultant of choice for our clients and continue to win repeat business in addition to increasing our client base year-on-year.”

The Wind Academy’s director Geoff Briggs called it a “significant step forward” for his business

A Blyth training provider to the growing offshore energy sector its plotting its own expansion after securing funding.

The Wind Academy, which specialises in vocational courses for renewables industry, is set to extend its facilities at the Port of Blyth following the injection of more than £42,000 from the Business Growth Fund. It will support training infrastructure for wind turbine technicians working on offshore and onshore developments.

The Academy’s growth ambition is led by director Geoff Briggs and business development manager, Olly Hassan, who are broadening its training capacity and industry partnerships.

Mr Briggs said: “This funding is a significant step forward for the Wind Academy. It allows us to invest directly in our training facilities and ensure we are delivering high-quality, industry-ready training for the offshore and onshore wind sectors.

“As demand for renewable energy skills continues to rise, this support helps us grow sustainably and create real opportunities for people in the region.”

The Business Growth Fund support was delivered through Business Northumberland. Coun Richard Wearmouth, cabinet member for regeneration at Northumberland County Council, said: “The Wind Academy is playing an important role in developing the skills needed for the future of renewable energy. This funding will help the business grow, invest in its facilities and continue supporting the region’s low-carbon economy.”

Jon Paul Heron, business advisor at UMi, who helped guide the process, added: “It’s been a pleasure supporting the Wind Academy on its growth journey. This investment will help strengthen its position as a key training provider for the wind sector and support long-term economic growth in Northumberland.”

The Wind Academy is based out of the Energy Central learning hub at the Port of Blyth, which has recently announced its own major expansion programme in a bid to capture more work in offshore wind. Bosses this week set out a £100m vision which includes reclaiming up to three hectares of land from the River Blyth estuary at the port’s Battleship Wharf terminal.

The additional space and facilities will be marketed at wind farm developers and operators amid an expected influx of North Sea energy projects. The North East is well placed to benefit from the Government’s next offshore lease auction that could take place in 2027 and could feature predominantly sites off the region’s coast.

That round could bring another 6GW of wind energy to the UK though it is unlikely that turbines will be in place and turning before the 2030s.

Dominic Barton

Good afternoon to everyone here in Perth, and good morning to all of those joining us from London, and welcome also if you are tuning in virtually. As Chair of Rio Tinto, I have the privilege of welcoming you to our 2026 Annual General Meetings. This year, in keeping with our focus of embedding stronger, sharper and simpler ways of working across the business, we are holding the Rio Tinto plc and the Rio Tinto Limited AGMs contemporaneously.

Our meetings are linked audiovisually, so all shareholders can participate in a joint discussion as provided for under Rio Tinto plc’s Articles of Association and Rio Tinto Limited’s constitution. As you know, AGMs are an opportunity for open conversations and for deepening understanding. They allow us as a Board to hear from you and to respond to the topics you are interested in.

And next year, our directors will be present in person at the plc AGM in London with a limited AGM held contemporaneously in Australia. And we plan to continue this arrangement for future AGMs with our directors alternating their physical attendance annually. This naturally builds on our regular engagement with investors throughout the year. In fact, over the last 2 months, I’ve met personally with shareholders representing more than 1/4 of Rio Tinto plc’s issued capital and 1/3 of Rio Tinto Limited’s issued capital.