The IT sector has been a subject of much discussion in Indian markets, especially after major firms reported their third-quarter earnings for the financial year ending March 2026. With the year just kicking off, Pankaj Murarka, CIO of Renaissance Investment Managers, believes the IT sector is set to outperform markets in 2026.
Speaking to NDTV Profit, Murarka explained that a shift in client sentiment and the maturation of artificial intelligence could pave the way for the IT sector to realise better growth prospects in this calendar year.
"All of them are seeing that the environment is improving gradually," Murarka said, referring to the top five IT firms. "They're seeing many more deals, client conversations, and engagements are improving."
Murarka notes that while major IT companies have stated that the spending environment in the US has been sluggish in the last eight quarters, a pivot is currently underway.
"The growth outlook for calendar year '26 is going to be a better year than calendar year '25 in terms of growth," he said, explaining that the maturation of AI is going to play a key role in this shift.
"Now it's been three and a half years since the first model of AI, ChatGPT-1, was rolled out... now clearly AI is getting into the implementation phase. The expectation is probably '27 will be better than '26," he said.
At the start of the year, NDTV Profit reported that top IT firms in India are rapidly pivoting to AI, which has become the buzzword for management recently. The IT sector also saw some big AI-led acquisitions at the end of 2025, headlined by Coforge's acquisition of Encora.
"We expect a gradual uptick in IT spending and a gradual improvement in growth trajectory for IT companies going forward from here. In that context, I think the sector should outperform this year. The sector has been a big underperformer last year—so I think that should come back," Murarka concluded.
Also Read: 15x Jump in AI References: What IT Management Commentary Reveals About India's Tech Pivot
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