Nuvama maintains 'Buy' on these 7 IT stocks; stays bearish on two
According to Nuvama, most Indian IT firms outperformed expectations in Q2 FY26, reporting sequential growth or stable performance, aided by margin expansion driven by foreign exchange gains and operational efficiencies.
- Nov 11, 2025,
- Updated Nov 11, 2025 5:34 PM IST
Nuvama Institutional Equities has reiterated its bullish stance on select Indian IT companies following a better-than-expected September-quarter (Q2 FY26) performance. The brokerage maintained a 'Buy' rating on Coforge, Persistent Systems, Mphasis, LTIMindtree, Hexaware, Tata Consultancy Services (TCS) and Infosys, while retaining a negative view on Tech Mahindra and Birlasoft.
According to Nuvama, most Indian IT firms outperformed expectations in Q2 FY26, reporting sequential growth or stable performance, aided by margin expansion driven by foreign exchange gains and operational efficiencies.
Infosys and HCLTech raised the lower end of their FY26 revenue growth guidance, while others maintained their outlooks. Tier-2 firms continued to outperform Tier-1 peers in growth and deal momentum.
The domestic brokerage, however, flagged continued macroeconomic and tariff-led uncertainties that could weigh on near-term demand.
"We expect the demand environment to remain challenging for the next one–two quarters due to macro and tariff-led uncertainty. But we remain positive on the medium-to-long term outlook as technology debt continues to be very high for enterprises, which demands a revival in spending as macro improves," Nuvama noted.
It added that the rapid macro deterioration since early CY26 is likely to result in a modest FY26, with a potential recovery in the second half of the fiscal year.
Large-cap IT players may witness tepid growth in the near term, but Nuvama expects a rebound over the medium term, led by a revival in technology spending and opportunities from generative AI.
Valuations across the sector have corrected sharply -- around 15 per cent in the last 12 months -- and now trade close to their 10-year averages. "Estimates have been adequately cut and stocks are now trading at highly attractive valuations," the brokerage stated.
Nuvama Institutional Equities has reiterated its bullish stance on select Indian IT companies following a better-than-expected September-quarter (Q2 FY26) performance. The brokerage maintained a 'Buy' rating on Coforge, Persistent Systems, Mphasis, LTIMindtree, Hexaware, Tata Consultancy Services (TCS) and Infosys, while retaining a negative view on Tech Mahindra and Birlasoft.
According to Nuvama, most Indian IT firms outperformed expectations in Q2 FY26, reporting sequential growth or stable performance, aided by margin expansion driven by foreign exchange gains and operational efficiencies.
Infosys and HCLTech raised the lower end of their FY26 revenue growth guidance, while others maintained their outlooks. Tier-2 firms continued to outperform Tier-1 peers in growth and deal momentum.
The domestic brokerage, however, flagged continued macroeconomic and tariff-led uncertainties that could weigh on near-term demand.
"We expect the demand environment to remain challenging for the next one–two quarters due to macro and tariff-led uncertainty. But we remain positive on the medium-to-long term outlook as technology debt continues to be very high for enterprises, which demands a revival in spending as macro improves," Nuvama noted.
It added that the rapid macro deterioration since early CY26 is likely to result in a modest FY26, with a potential recovery in the second half of the fiscal year.
Large-cap IT players may witness tepid growth in the near term, but Nuvama expects a rebound over the medium term, led by a revival in technology spending and opportunities from generative AI.
Valuations across the sector have corrected sharply -- around 15 per cent in the last 12 months -- and now trade close to their 10-year averages. "Estimates have been adequately cut and stocks are now trading at highly attractive valuations," the brokerage stated.