New Delhi, Nov. 12 -- India's IT services sector is gradually moving beyond concerns over artificial intelligence (AI) disrupting traditional business models, with investors now focusing on revenue stabilization and the ability of companies to deliver sustainable growth, according to a report by Kotak Institutional Equities.

The shift in market sentiment comes despite a mixed performance in the second quarter of FY27, with demand remaining subdued and revenue growth among large IT companies staying at low-single-digit levels.

The report said results for Tier-1 IT companies were middling, with their year-on-year organic revenue growth declining to low-single-digit levels. Mid-tier companies performed relatively better, although some also...