Shares of Infosys and major Indian IT firms fell after Jefferies downgraded six companies in the sector.
The brokerage downgraded Infosys from 'Buy' to 'Hold' and significantly cut its price target.
Jefferies identified artificial intelligence as a structural threat to traditional IT business models.
The shift toward AI-driven consulting and implementation is expected to shrink the lucrative managed services segment.
This transition increases revenue cyclicality and requires a major overhaul of talent and operating models.