While new business creation will offset some of the impact, overall growth will be slower compared to the past decade. Jefferies projects the IT sector to grow at about 3.5–4% CAGR over the next three years, versus 7–8% CAGR in the previous 10 years. Mangal noted that mid-sized IT firms may be better placed to adapt to the AI transition as they are more nimble, while large-cap firms could feel the pressure on valuations.
On the digital infrastructure front, Mangal highlighted the strong growth outlook for data centres. He said the leasing market could expand nearly fivefold by 2030, with telecom companies being big beneficiaries. Beyond them, ancillary firms in areas such as electricals, power, and cooling systems also stand to gain. “A lot of facility-based capex will get captured by ancillary companies,” he pointed out.
Mangal also remains upbeat on the auto sector. He believes GST and income tax cuts will act as major tailwinds for demand, especially at the entry and mid-level segments. Two-wheelers are expected to lead growth, followed by tractors, passenger vehicles, and then trucks. “Two-wheelers have not seen the full cyclical recovery post-COVID… that provides a very benign base for strong growth from here,” he said.
