Indian IT stocks could gain 30-40% over 2–2.5 years, says Sandip Agarwal

what happened

Sandip Agarwal, fund manager at Sowilo Investment Managers, which oversees more than $25 million in assets, says Indian IT stocks could return at least 30–40% over the next two to two and a half years. He points to strong management teams, healthy cash flows and rising demand for AI-related services.

Agarwal expects pressure on margins and AI-led deflation, which have weighed on the sector for the past eight to nine months, to ease gradually. He sees the impact of AI-driven pricing pressure shrinking in the December and March quarters, and says revenue growth could help margins recover and support earnings in the coming financial year. He also estimates AI's share of revenue at large-cap IT firms could reach at least 15% in FY28 and 22–23% in FY29.

Sowilo has significantly increased its IT exposure. The fund had none in March, while the sector now accounts for more than 20% of its portfolio, holding six to seven IT stocks, with room to add more if opportunities arise.

why it matters

This is one fund manager's view, not a sector-wide consensus, and the return target is not backed by published calculations. For investors, the key signals are revenue and margin trends in upcoming Indian IT earnings and how AI affects services pricing.

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