Helios Mutual Fund’s Dinshaw Irani signals a cautious stance on India’s large-cap IT firms, favouring smaller technology companies poised to benefit from AI-linked growth and domestic opportunities.
Dinshaw Irani is making a clear bet against India’s large-cap information technology stocks, arguing that the sector’s problems run deeper than a short-term slowdown. In remarks reported by Business Today and The Economic Times, the Helios Mutual Fund executive said growth visibility in IT services is weakening and pointed to guidance cuts as evidence that the pressure is already showing up in company outlooks. He said that even if artificial intelligence does not turn out to be the industry’s main disruptor, the slowdown in guidance suggests something is already weighing on the business.
Irani’s case is that the biggest listed IT firms may struggle to justify the valuations they have long enjoyed if revenue growth keeps resetting lower. The combination of shorter deal cycles, softer discretionary spending and the risk that AI changes how services are priced could force investors to rethink the premium attached to predictable earnings and large balance sheets. The view also fits with Helios’s broader shift, which the Economic Times says has involved moving away from large companies and towards mid- and small-cap names where earnings growth is stronger.
Where Irani is more constructive is in smaller technology firms, which he believes can benefit more quickly from AI-linked contracts because the revenue base is much smaller. He argued that a $10 million order may barely move the needle for a business with billions of dollars in sales, but can be meaningful for a company with about $100 million in revenue. More broadly, Helios has been leaning into domestic consumption themes and other areas tied to India’s internal growth story, while staying cautious on sectors such as metals and US-facing pharma, according to the Economic Times. Morgan Stanley has separately noted that investors are becoming more selective on AI spending as questions grow around returns on investment and the broader market backdrop has become less forgiving.
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