Worst likely behind for IT sector; mid-tier firms hold edge: Deven Choksey
"Whatever the frontline IT companies' results and some of the mid-tier IT companies' results that I have studied, I believe the worst probably seems to be behind them," Deven Choksey told Business Today.
- Jul 24, 2025,
- Updated Jul 24, 2025 11:51 AM IST
Deven Choksey, Managing Director at DRChoksey FinServ Pvt Ltd, believes the worst may be behind the Indian IT sector, especially for select frontline and mid-tier companies. In a conversation with Business Today on Thursday, the market veteran shared his insights on the improving outlook for IT firms and offered a cautiously optimistic take on the sector.
"Whatever the frontline IT companies' results and some of the mid-tier IT companies' results that I have studied, I believe the worst probably seems to be behind them," he said.
Choksey noted that most companies are no longer preoccupied with past challenges. "Now in fact, every management commentary is talking about one single thing -- how soon and how fast order inflows would start coming in. When this process becomes regular and larger, then we may see relatively better times going forward. Moving from single-digit growth to double-digit growth is distinctly possible," he added.
Choksey also highlighted a major transition underway within the sector, as companies revamp their business models to incorporate AI and platform-based solutions across customer segments. "We are very interestingly watching this transition and will see how they win some of the larger orders," he said.
For investors, Choksey highlighted the potential in mid-tier IT companies, specifically those focused on engineering and R&D. He noted that their B2B portfolios are performing significantly better than those of frontline peers, making them attractive picks. "We would selectively choose some of these mid-tier IT firms from the broader IT basket," he advised.
Addressing concerns over attrition in top IT firms, Choksey pointed out that this trend reflects agility and a focus on profitability. "The talent needs to be skilled again. This attrition suggests that companies are agile and are placing significant emphasis on profitability."
Choksey urged investors to take a measured approach. "We should be a little bit slow and moderate in selecting IT stocks. As of now, Infosys has definitely given better expectations," he said.
On the banking sector, Choksey noted it remains a highly competitive space. "There is going to be pressure on margins for most banks, but at the same time, growth will come from organic opportunities present in the current environment," he concluded.
Deven Choksey, Managing Director at DRChoksey FinServ Pvt Ltd, believes the worst may be behind the Indian IT sector, especially for select frontline and mid-tier companies. In a conversation with Business Today on Thursday, the market veteran shared his insights on the improving outlook for IT firms and offered a cautiously optimistic take on the sector.
"Whatever the frontline IT companies' results and some of the mid-tier IT companies' results that I have studied, I believe the worst probably seems to be behind them," he said.
Choksey noted that most companies are no longer preoccupied with past challenges. "Now in fact, every management commentary is talking about one single thing -- how soon and how fast order inflows would start coming in. When this process becomes regular and larger, then we may see relatively better times going forward. Moving from single-digit growth to double-digit growth is distinctly possible," he added.
Choksey also highlighted a major transition underway within the sector, as companies revamp their business models to incorporate AI and platform-based solutions across customer segments. "We are very interestingly watching this transition and will see how they win some of the larger orders," he said.
For investors, Choksey highlighted the potential in mid-tier IT companies, specifically those focused on engineering and R&D. He noted that their B2B portfolios are performing significantly better than those of frontline peers, making them attractive picks. "We would selectively choose some of these mid-tier IT firms from the broader IT basket," he advised.
Addressing concerns over attrition in top IT firms, Choksey pointed out that this trend reflects agility and a focus on profitability. "The talent needs to be skilled again. This attrition suggests that companies are agile and are placing significant emphasis on profitability."
Choksey urged investors to take a measured approach. "We should be a little bit slow and moderate in selecting IT stocks. As of now, Infosys has definitely given better expectations," he said.
On the banking sector, Choksey noted it remains a highly competitive space. "There is going to be pressure on margins for most banks, but at the same time, growth will come from organic opportunities present in the current environment," he concluded.