New Delhi, March 18 -- Indian IT stocks have witnessed a sharp correction following the launch of advanced Claude Cowork Agentic AI plugins in February 2026. The Nifty IT Index has declined more than 21% on a year-to-date (YTD) basis and is currently trading at around 15.4x two-year forward earnings, broadly in line with the Nifty 50. This compares with its long-term average premium of about 17% over the benchmark index.

According to ICICI Securities, the launch of advanced AI agents is unlikely to upend IT delivery models overnight, but the advancement in AI agents inflates the risk of AI-led revenue deflation. The correction in valuations captures the structural AI headwinds leading to prolonged subdued growth for the industry.

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