Kumar Rakesh, an analyst at BNP Paribas, has issued a warning against labeling large-cap IT stocks as 'value plays' following disappointing FY27 guidance. He notes that revenue growth is expected to remain modest, primarily due to client-specific challenges rather than sector-wide issues. The ongoing conflict in the Middle East has stalled client spending, further complicating the outlook. Rakesh highlights a significant growth divergence among IT companies, particularly those disrupted by artificial intelligence (AI) versus those better positioned to adapt. While he acknowledges that AI represents a structural shift in technology, he believes it will not fundamentally undermine the business model of Indian IT services firms. Rakesh advocates for a selective investment approach that favors companies with strong cash flow and less exposure to AI disruption. He also notes that buybacks and dividends can serve as effective buffers against market downturns, especially for firms facing short-term growth challenges.