Indian IT firms urged to reinvest in innovation

Indian IT firms generated $20 billion in free cash flows last year, returning over 75% to shareholders. However, experts suggest a reset is needed as AI disrupts traditional business models, urging companies to reinvest in innovation instead of focusing solely on short-term returns. The sector is experiencing single-digit growth, with financial services under pressure and lower discretionary spending limiting growth potential. Automation is also impacting basic coding tasks, posing challenges for Indian developers. Industry leaders emphasize the importance of balancing innovation with shareholder expectations. They propose using cash flows for strategic investments in technology and infrastructure to adapt to changing market conditions and capitalize on new opportunities.