Bagga mentioned that while entry-level scooters and electric two-wheelers have sparked interest, actual demand has yet to fully develop. “Tractors are doing well, but commercial vehicles haven’t picked up due to longer replacement cycles. Two-wheelers, especially premium motorcycles in rural areas, are currently the preferred segment,” he added.
Passenger vehicles may only see a boost if GST cuts are enforced since the current market remains mostly flat.
IT Sector: AI boom fails to translate into immediate gains
While there is a lot of talk about an AI-driven boom in tech globally, the Indian IT sector’s experience has been mixed. Bagga noted that entry-level hiring in IT has dropped significantly—from over 250,000 new hires each year to around 50,000—mainly due to automation and AI use.
“AI is changing the value chain rather than replacing coders,” he explained. “Suppliers, data center operators, and semiconductor companies have been the main beneficiaries, not traditional IT firms.” He referenced reports from MIT and McKinsey showing limited revenue growth from AI adoption across companies. He pointed out that even Nvidia’s recent strong earnings did not impress markets because of high expectations surrounding AI investment.
Looking ahead, Bagga believes Indian IT companies have two strong paths: either focus on implementing AI for end-users or serve as outsourcing hubs and Global Capability Centers (GCCs) for Fortune 500 companies. “With potential visa limits in the U.S., we could see more outsourcing to India, where IT companies can offer both workforce and management oversight,” he said.
According to Bagga, the key point is that while AI grabs headlines, the real winners in India may be the supporting industries for AI infrastructure rather than the main IT companies.
Bottom line
Investors watching two-wheelers should keep an eye on rural demand trends, especially for premium motorcycles. Meanwhile, those monitoring the IT sector may need patience as the hype around AI slowly changes the market landscape.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)