Mid-Size Indian IT Companies Will Do Better Despite US Visa Uncertainty, Says Vikas Khemani

Mid-size Indian information technology companies may do better than their larger peers even under macro uncertainty, according to Vikas Khemani.

"Large IT companies are going through the process of building AI capabilities. Order books have remained decent. Given that they are large, growth will be limited. Mid-size IT companies will do well," Khemani, founder and chief investment officer at Carnelian Asset Management, told NDTV Profit.

"Every time there is a technological transformation, new companies do well. Post the global financial crisis, companies like LTIMindtree, Persistent, and HCLTech went from being minnows to 15 and 20x in their journey," he said, adding, "In this cycle too, large companies will remain around but smaller companies might benefit far more."

Khemani also said IT services at a global level will only grow because of AI-related technologies.

He dismissed suggestions that India has missed out on AI, saying the country will mint many world-leading tech companies in the next ten years.

"Indian IT services have served the economy very well. We have large forex reserves thanks to them and a lot of employment was generated. A lot of companies are being incubated, which will take lead in AI," he said.

The US hs imposed a $100,000 one-time fee on fresh H-1B visas, a vast majority of which have historically gone to high-skilled Indian IT workers. The H-1B is a classification of non-immigrant visa in the US that allows American employers to hire foreign workers in specialty occupations.

The fund manager also said India's stock market will recover and pull ahead in the next six to eight months. He cited direct and indirect tax cuts, lower borrowing costs, and higher liquidity as reasons for the optimistic outlook.