Sandeep Shah, Director at Equirus Securities, said a combination of factors is bringing long-term investors back to the sector to accumulate quality stocks at attractive valuations.

The first factor, according to Shah, is the rising cost of AI operations. He said, "Rising token cost (a key component in AI operating) is making many large enterprises cautious towards their AI-led infra/capex spend, with growing realisation to drive ROI on such capex. This in one way requires tight IT system integration with AI-led infra/hardware/software/tools in large organisations, which require data engineering, cloud migration, application modernisation and creating guardrails/cybersecurity walls, amongst others. These services are better provided by system integrators (SI)/IT Services providers (ISP), considering their hands-on experience in managing complex IT architecture, with a deep understanding of contextual knowledge and business workflows of large enterprises."

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