From AI disrupted to AI-driven growth: Here's what is fueling IT sector's growth

Indian IT stocks were back in action today as the NIFTY IT index rallied nearly 2% in early trades on Friday. This came after the global IT and consulting firm Accenture Plc reported robust earnings growth in Q2FY26. Moreover, the IT bellwether raised its guidance for the full financial year, boosting investor confidence for IT stocks, which have seen sharp corrections amid concerns about the adverse impact of AI adoption on traditional software services.

However, few experts believe it is too early to write off the IT sector, which can adapt to the structural changes in the industry at fast pace. The current price correction in IT stocks shows that most of the impact of AI-led disruption on IT companies is already discounted. Whether or not AI has really impacted the earnings of IT companies is yet to be fully ascertained. Meanwhile, the latest developments in the industry provide a ray of hope despite the gloomy atmosphere around it.

Here are some factors that are lifting the sentiment for IT companies.

Accenture results boost confidence

The key takeaway from the Accenture Plc results signal a relief from the narrative that AI-led disruption is eating away the IT services revenue. The global consulting delivered the revenue growth in line with the guidance provided. The bookings for the quarter also hit record levels at $22 billion, contrary to the broader narrative of the adverse AI impact on the IT industry. Moreover, the strong operational efficiency and upwardly revised guidance could help lift the waning sentiment around IT companies.

Hiring increase

After the initial layoffs across the IT spectrum, the hiring trend is back as attrition rates fell below 15%. Lower attrition signals long-term employment commitment, which benefits the company in garnering long-term high value projects. Accenture Plc’s results also highlight strong hiring trend as the company hired 85,000 AI professionals, hitting the year-end goal of 80,000 hires ahead of the schedule. The data centre boom is also creating massive hiring opportunity for hardware engineers, cloud Architects and others, indicating that the broader hiring trend remains intact.

Focused hiring

The hiring trend is also showing a structural change within the space as mass hiring is being replaced with focused hiring. Majority of the employers are now priortising demonstrable skills over traditional credentials. Companies are ensuring that employees are compatible with changing dynamics of the industry driven by AI adoption. Consequently, generalist roles are shrinking and skill-focused roles like agentic AI engineers, cybersecurity engineers and data architects are witnessing rising demand.

Global brokerages turn positive

The latest CLSA report signaled a strong demand-led growth for the IT industry without any price-led deflation risks. The report said that IT companies are adopting AI across the spectrum and turning it into a value-add feature, rather than using it as a cost-saving feature. The report highlights no evidence of AI-led pricing deflation in the industry. According to the report, the hiring growth in the IT space remains robust at 6.4% as of February 2026.

Key takeaway

In simple words, the reality in the IT industry is in sharp contrast to the larger fears visible in the recent price movements of IT stocks. Earnings from global IT firms also suggest that the broader demand remains strong across the spectrum of IT services. Going forward, the IT sector could become a story of ‘AI-driven growth’ rather than ‘AI-disrupted growth’. That said, the Q4FY26 earnings and commentary will provide a clearer picture and outlook for Indian IT companies.