At 1:50 pm, the Nifty IT index traded half a percent higher at 44,277.75. Mphasis, Tech Mahindra and LTI Mindtree traded more than a percent higher whereas Infosys and Coforge each traded 0.7% higher, HCL Tech shares were up 0.3% and TCS was up 0.05% on NSE at 1:53 pm.
As the IT index witnesses an uptrend, brokerage Bernstein has in a note said that it continues to see the beginning of an up-cycle trend as growth recovers, with BFSI inflects and AI deals scaling up in the IT services industry. It believes FY26 will be a normalised year, continuing from the second half of FY25.
According to the brokerage, growth expectations are to be led by the strength of order books of IT services companies and the reduction in leakages.
| IT stock | YTD return |
| Mphasis | 11.13% |
| LTI Mindtree | 0.45% |
| Tech Mahindra | 35.84% |
| Coforge | 40.08% |
| Infosys | 24.71% |
| HCLTech | 28.34% |
| LTTS | 4.68% |
| Persistent Systems | 62.58% |
| Wipro | 22.67% |
| TCS | 14.14% |
Bernstein prefers select large caps, including Infosys and TCS, which have high US exposure i.e. 50-60% and BFSI mix of about 30%, as they have stronger customer relationships and margin resilience.
In the small and midcaps space, the brokerage prefers specialised players in software like Persistent Systems, which has an 80% US revenue mix, as it believes the firm is best positioned to grow in the high teens in the medium term.
Also Read: The most expensive tech stock may sustain its valuations or even re-rate further, says JPMorgan
Separately, brokerage firm JPMorgan also retained its overweight stance on Persistent Systems with a target price of ₹6,900, implying a potential upside of 15.5% from the closing price on November 26.
JPMorgan is of the view that Persistent Systems is the most expensive tech stock globally with one year forward P/E of 58x. It believes that the valuation is likely to sustain or it could even re-rate further. The brokerage came up with a bull-case scenario that bakes in less than 20% revenue growth in FY26 and FY27 and a higher P/E multiple of 50x that drives a fair value of ₹7,100, which is a 19% potential upside, it said.
According to JPMorgan Chase, Persistent Systems would see a 22% revenue compound annual growth rate (CAGR) over FY25- 27 versus IT companies’ growth of 8%.
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