Battle for AI talent
The February job market report reveals a significant concentration of growth in the high-skilled artificial intelligence and machine learning (AI/ML) sector. Within the IT sector, AI/ML-specific hiring increased by 40%, contributing significantly to the overall sector’s 6% year-over-year growth. Across the broader market, AI/ML roles saw an impressive 49% year-over-year increase. This surge has been primarily driven by Indian multinationals, which have recorded a staggering 82% increase in AI/ML adoption, much higher than the 43% growth seen among foreign multinationals. This aggressive investment by domestic companies demonstrates the strategic urgency to ensure cutting-edge technological capabilities. Globally, India is at the forefront of AI talent acquisition, with a growth rate of 33.4% in April 2025 and AI skills penetration more than doubling since 2016.
Resilience and broader benefits beyond IT
Beyond the transformation of the technology sector, a variety of non-IT industries continue to provide a stable employment base. The insurance sector led the sector with 28% growth, closely followed by BPO/ITES (22%), real estate (19%), hospitality/travel (15%), and retail (14%). This widespread demand across sectors has led to a 17% annual increase in overall graduate recruitment. Additionally, demand for positions with an annual salary of Rs 20 million or above increased by 23%, demonstrating sustained strength across both entry-level and experienced professional sectors. Notably, there has been a significant 45% increase in roles within the IT sector that earn more than Rs 50 million annually, highlighting the high value placed on specialized IT expertise.
Market sentiment and IT sector headwinds
While February’s jobs report reflects strong domestic demand, the broader IT sector faces a mixed outlook influenced by global economic factors and the disruptive potential of AI. Analysts have expressed caution, with some global brokerages predicting potential revenue compression and downgrades for major IT companies due to AI’s impact on traditional service lines. Concerns center on the potential for AI to erode revenue from high-margin application services, with FY27 revenue growth forecasts likely to be slower, perhaps around 4-5%. This pessimism has contributed to a significant decline in the market value of major tech companies, with some companies seeing declines of 15% to 30% from their peaks. However, a paradoxical view suggests that AI may create new areas of work and partnerships, with IT companies acting as key “plumbers” to integrate these advanced capabilities. Naukri’s parent company Info Edge India has a market capitalization of around Rs 65,000 crore as of early March 2026 and operates at a P/E ratio of around 47.9 times. The company’s share price has hovered around ₹1,000 ₹1,100 ₹1,100 from February to early March 2026, reflecting market valuation dynamics amid these sector-wide discussions.
⚠️ Forensic Bear Incident
Despite impressive growth, significant risks loom for India’s IT sector and, by extension, job market platforms like Naukri. While the rapid advancement of AI is creating specialized roles, it also poses a structural threat to established revenue models, particularly in application services, which account for a significant portion of IT companies’ revenue. Analysts have warned that the deflationary impact of AI on legacy services could outweigh the benefits of new opportunities with AI, leading to valuation downgrades of 30-65% for some companies. Geopolitical tensions in West Asia are also contributing to customer decision-making slowdowns and project postponements, further heightening concerns about future revenue streams. Additionally, while India is leading in AI talent acquisition, regulatory frameworks and upskilling initiatives are critically needed to manage potential attrition and ensure fair sharing of the economic benefits of AI. The informal sector, which makes up the majority of India’s workforce, remains particularly vulnerable to automation without adequate reskilling and social protection.
Future trajectory
Naukri Chief Business Officer Pawan Goyal said the strong month-on-month acceleration and intensive growth in AI/ML roles suggests solid momentum heading into the new financial year. Indian companies are investing strategically in AI talent, demonstrating a proactive approach to future-proofing their operations. While the continued development of responsible AI principles and privacy legislation provides a foundation, a comprehensive regulatory framework for AI’s broader societal and employment impacts is still evolving. The market response to this dual narrative—AI as a driver of high-value jobs and a potential disruptor of traditional IT revenue—will determine the trajectory of both the job market and the publicly traded companies within it.
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