Infosys, LTIMindree, Coforge Among IDBI Capital's Preferred Stocks In IT Services After Q3 Results— Here's Why

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IDBI Capital Report

Fewer furloughs and revival in BFSI drove sector growth, barring a few pockets. Amid the uncertain US macro environment, Indian IT firms saw recovery in discretionary and AI-related spend (core and infused), supported by traction in small deals and improved execution cycles, indicating a solid near-term outlook.

However, some companies faced project cancellations, with continued softness in technology, media, and telecom and retail and continue to expect the same during Q4 too.

A surge in AI deals is prompting firms to scale their capabilities and workforce. It is likely that companies may pass on AI deal benefits to clients in the near term, potentially impacting revenue. Despite this, improving demand and green shoots in IT and AI spending present strong opportunities.

In our coverage, we expect Infosys/LTIMindree in large cap and Coforge in mid-cap (within our universe) will perform better in the near term by capitalizing on these prospects.

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