Jefferies has downgraded the ratings of six Indian IT companies, citing expected structural changes in their business due to the impact of artificial intelligence tools.

The brokerage lowered its rating for Tata Consultancy Services (TCS), India's largest IT exporter, from "hold" to "underperform." It also downgraded Infosys and HCLTech from "buy" to "hold," while reducing LTIMindtree and Hexaware Technologies to "underperform" and Mphasis to "hold." Following the announcement, India's Nifty IT index fell by 1.1%, making it the worst-performing sector among major industries.

Jefferies indicated that artificial intelligence is likely to shift the IT business structure toward consulting and implementation while reducing the scale of managed services. This shift is expected to increase cyclical volatility in the industry and require companies to adjust their talent structures and operational models, thereby heightening risks.