AI could change India's biggest IT business model, says market veteran

Speaking to Moneycontrol about the next phase of AI adoption, Agrawal said the real transformation lies beyond consumer-facing applications.

"The first is consumer AI, which everyone is already experiencing. The second is enterprise AI. That is where the real transformation will happen," he said.

Explaining how AI is likely to be integrated into businesses, Agrawal said Indian IT professionals will play a key role in implementing enterprise AI solutions.

"The question is: how do businesses integrate AI into their operations, and what impact will it have? Much of that implementation work will be done by Indians," he said.

Agrawal noted that AI also raises important questions about the long-established business models of IT services companies that have driven the sector's growth over the past few decades.

"Now think about the IT services companies that have enjoyed tremendous growth over the last 25 to 40 years. How much of that business model remains unchanged? That is the question," he said.

He added that the impact of AI will vary across companies, depending on how effectively they adapt to the technological shift.

"Some companies will adapt very well. Some will grow more slowly," Agrawal said.

According to him, AI has the potential to significantly reduce operating costs for service businesses, leading to improved profitability.

"Take service companies. If AI can reduce costs from, say, 35–60 percent to much lower levels, profitability improves dramatically," he said.

Agrawal added that lower costs could translate into stronger earnings for listed companies, particularly in the services sector.

"From the perspective of listed companies, especially service businesses, lower costs mean higher earnings. That's why I remain bullish on the market," he said.