MUMBAI, February 26 — The IT sector transition will create both winners and losers as the industry undergoes structural change, Standard Chartered Securities said on Thursday, outlining that historical shifts in technology services have led to sector evolution.
Gaurav Dua, Chief Investment Officer at Standard Chartered Securities India, addressed the ongoing shifts in the technology space at a market event in Mumbai, saying that the current phase of transition driven by artificial intelligence and changing demand patterns is consistent with past industry transformations.
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Standard Chartered Notes Structural Change in IT Sector
Dua said the IT sector transition has parallels with past transformations, such as the shift after the dot-com bust, where companies adapted from legacy models to new enterprise technologies, and later to cloud computing and digital services.
He noted that as the industry evolves, some firms may outperform by aligning with new technologies while others may lag, reflecting differentiation among market participants.
This pattern of divergence, he added, is typical in sectors undergoing technological change, where shifts in service delivery and client demand reshape competitive landscapes.
Historical Shifts and Current Phase
According to Standard Chartered Securities, past industry shifts helped reshape company strategies and service models, resulting in long-term sector resilience.
Dua said the industry has previously navigated transitions including:
- Moving from automated data management to enterprise software packages
- Pivoting to quality assurance and infrastructure services
- Adopting cloud computing and advanced digital transformation frameworks
These historical cycles, he said, illustrate how structural changes can lead to reallocation of market share between firms with differing capabilities.
He added that in each past transition, some companies were unable to adapt and lost market relevance, while others gained competitive positioning.
Impact of Artificial Intelligence on IT Services
Dua highlighted artificial intelligence as the next phase of transition within the IT sector transition, saying AI will displace some low-end processes but also accelerate enterprise technology spending.
“AI will take over some of the mundane, low-end work,” he said, while noting that application-specific AI integration would create demand for higher-value software services.
He explained that global corporations seeking to fast-track digital transformation will need to replace legacy systems and adopt new tools, a trend expected to influence demand for IT services across markets.
This perspective reflects a broader theme in industry commentary that AI is a catalyst for change rather than a standalone determinant of sector performance.
Current Market Dynamics and Strategy Advice
Talking about portfolio strategy amid the IT sector transition, Dua said Standard Chartered Securities recommends a balanced approach combining top-down and bottom-up assessment to construct investment portfolios.
He emphasised that clients should not make reactionary portfolio decisions, suggesting calibrated adjustments based on stock-specific fundamentals and broader market context.
He said the firm has maintained a neutral stance on IT stocks and is advising clients to consider a mix of exposure levels rather than wholesale exits.
This reflects an emphasis on identifying companies poised to benefit from structural shifts rather than assuming sector-wide outcomes.
Market Reaction and Industry Commentary
Markets have seen notable volatility in IT stocks recently, with sharp price swings and corrections influenced by macroeconomic conditions and uncertainty around technological disruption.
The IT sector transition commentary from Standard Chartered Securities follows trends observed in equity markets where technology shares have experienced varying performance across subsegments.
Analysts tracking Indian IT equities note that companies with stronger digital transformation portfolios and client diversification may weather disruption more effectively, reflecting divergence among industry players.
While Standard Chartered Securities did not provide specific stock recommendations, the comments underscore sector heterogeneity rather than uniform performance expectations.
Broader Context and Industry Significance
The Indian technology services sector represents a significant portion of market capitalisation on both the National Stock Exchange of India and the Bombay Stock Exchange, with key firms contributing to benchmark indices.
As part of the broader equity market ecosystem, developments in IT stocks are closely watched by institutional and retail investors, particularly amid changing global demand patterns.
Standard Chartered Securities’ remarks align with themes emerging in global technology sectors, where structural shifts related to AI, cloud adoption, and digital services significantly influence corporate strategies.
Industry observers note that transitions of this nature often result in a rebalancing of competitive dynamics, where firms invest in innovation to preserve market relevance.
Summary of Analyst View
Standard Chartered Securities’ Gaurav Dua said that the IT sector transition is a structural evolution comparable to past periods of transformation and that such phases historically produced both leaders and laggards among industry participants.
He reaffirmed that while short-term pain may be felt in specific companies or segments, the underlying changes reflect a broader industry shift rather than isolated disruptions.
The comments were made at a market event attended by investors and analysts, where insights on sector dynamics were discussed in relation to ongoing market conditions.
Standard Chartered Says IT Sector Transition Will Produce Winners and Losers
MUMBAI, February 26 — The IT sector transition will create both winners and losers as the industry undergoes structural change, Standard Chartered Securities said on Thursday, outlining that historical shifts in technology services have led to sector evolution.
Gaurav Dua, Chief Investment Officer at Standard Chartered Securities India, addressed the ongoing shifts in the technology space at a market event in Mumbai, saying that the current phase of transition driven by artificial intelligence and changing demand patterns is consistent with past industry transformations.
(Related: https://angelrupeez.com/nse-ipo-invites-investment-banks-2500m/ )
Standard Chartered Notes Structural Change in IT Sector
Dua said the IT sector transition has parallels with past transformations, such as the shift after the dot-com bust, where companies adapted from legacy models to new enterprise technologies, and later to cloud computing and digital services.
He noted that as the industry evolves, some firms may outperform by aligning with new technologies while others may lag, reflecting differentiation among market participants.
This pattern of divergence, he added, is typical in sectors undergoing technological change, where shifts in service delivery and client demand reshape competitive landscapes.
Historical Shifts and Current Phase
According to Standard Chartered Securities, past industry shifts helped reshape company strategies and service models, resulting in long-term sector resilience.
Dua said the industry has previously navigated transitions including:
These historical cycles, he said, illustrate how structural changes can lead to reallocation of market share between firms with differing capabilities.
He added that in each past transition, some companies were unable to adapt and lost market relevance, while others gained competitive positioning.
Impact of Artificial Intelligence on IT Services
Dua highlighted artificial intelligence as the next phase of transition within the IT sector transition, saying AI will displace some low-end processes but also accelerate enterprise technology spending.
“AI will take over some of the mundane, low-end work,” he said, while noting that application-specific AI integration would create demand for higher-value software services.
He explained that global corporations seeking to fast-track digital transformation will need to replace legacy systems and adopt new tools, a trend expected to influence demand for IT services across markets.
This perspective reflects a broader theme in industry commentary that AI is a catalyst for change rather than a standalone determinant of sector performance.
Current Market Dynamics and Strategy Advice
Talking about portfolio strategy amid the IT sector transition, Dua said Standard Chartered Securities recommends a balanced approach combining top-down and bottom-up assessment to construct investment portfolios.
He emphasised that clients should not make reactionary portfolio decisions, suggesting calibrated adjustments based on stock-specific fundamentals and broader market context.
He said the firm has maintained a neutral stance on IT stocks and is advising clients to consider a mix of exposure levels rather than wholesale exits.
This reflects an emphasis on identifying companies poised to benefit from structural shifts rather than assuming sector-wide outcomes.
Market Reaction and Industry Commentary
Markets have seen notable volatility in IT stocks recently, with sharp price swings and corrections influenced by macroeconomic conditions and uncertainty around technological disruption.
The IT sector transition commentary from Standard Chartered Securities follows trends observed in equity markets where technology shares have experienced varying performance across subsegments.
Analysts tracking Indian IT equities note that companies with stronger digital transformation portfolios and client diversification may weather disruption more effectively, reflecting divergence among industry players.
While Standard Chartered Securities did not provide specific stock recommendations, the comments underscore sector heterogeneity rather than uniform performance expectations.
Broader Context and Industry Significance
The Indian technology services sector represents a significant portion of market capitalisation on both the National Stock Exchange of India and the Bombay Stock Exchange, with key firms contributing to benchmark indices.
As part of the broader equity market ecosystem, developments in IT stocks are closely watched by institutional and retail investors, particularly amid changing global demand patterns.
Standard Chartered Securities’ remarks align with themes emerging in global technology sectors, where structural shifts related to AI, cloud adoption, and digital services significantly influence corporate strategies.
Industry observers note that transitions of this nature often result in a rebalancing of competitive dynamics, where firms invest in innovation to preserve market relevance.
Summary of Analyst View
Standard Chartered Securities’ Gaurav Dua said that the IT sector transition is a structural evolution comparable to past periods of transformation and that such phases historically produced both leaders and laggards among industry participants.
He reaffirmed that while short-term pain may be felt in specific companies or segments, the underlying changes reflect a broader industry shift rather than isolated disruptions.
The comments were made at a market event attended by investors and analysts, where insights on sector dynamics were discussed in relation to ongoing market conditions.