Investors considering Indian IT stocks should tread carefully, warns Vinit Bolinjkar of Ventura Securities. While the sector has delivered strong returns, its heavy exposure to the US market comes with growing risks. Tightening H-1B visa rules and potential disruptions from AI are key concerns that could impact revenue and hiring.

“Although IT has been doing rather well, we are a little cautious,” Bolinjkar said. “There is a lot of negative activity happening in the US, and the concentration to the US market is very high for Indian IT stocks. We see headwinds from H-1B visa restrictions and AI. That’s a real red flag.”

Instead, Bolinjkar recommends domestic-focused sectors as safer bets. The finance sector, particularly public sector banks like Canara Bank and SBI, as well as HDFC Bank and the NBFC space, are expected to benefit from GST-driven consumption growth and upcoming expansions.

He stressed that while IT stocks may still work out, the risk-reward ratio is currently less favourable compared to domestic plays. Investors seeking steady exposure to India’s economic growth may find more secure opportunities outside the IT space.