Infosys, Coforge Are Bernstein's Top Indian IT Picks As Earnings, Guidance Improvement Seen In FY26
Bernstein chose Infosys Ltd. as its top pick among Indian IT companies, as it will likely lead in scale and marginal stability among large caps. Coforge Ltd. and Persistent Systems Ltd. also stand out in the small- and mid-cap sections for the fastest growth rate, the brokerage said.
It sees earnings and guidance improvement for Indian information technology companies in financial year 2026, amid outperformance of the NSE Nifty IT. The index outperformed the benchmark NSE Nifty 50 as fear of a recession in the US reduced. Earnings upgrades and guidance improvements will likely pave the way for higher revenue in financial year 2027.
After interactions with Indian IT companies, Bernstein learnt that business outlook largely remained stable, with clients not anticipating any major demand deterioration. Large deals continued to be driven by cost-effective priorities. Growth-focused deals are beginning to emerge in the pipelines.
Artificial intelligence adoption has started to give tangible gains, particularly in functions like contact centres. However, the deployment is not yet enterprise-wide, Bernstein said.
Overall demand outlook remains stable. The financial segment is showing the strongest momentum as it got support from stable-to-slightly-higher budgets, amid growth in capital markets and banking. Energy and utilities continue to see healthy growth with a robust deal pipeline, while the communication sector remains steady, Bernstein said. Demand in the manufacturing segment is subdued.
To add to brownie points for IT companies, deal activity picked up across various sectors. In the fourth quarter of financial year 2025, total contract value rose to $21.9 billion for large-cap companies, which was led by Tata Consultancy Services Ltd., Infosys Ltd., and HCLTech Ltd., Bernstein said.
The TCV ratio of large-cap to midcap dropped to 5.9 times, which is the lowest in decades, highlighting stronger mid-cap momentum, it said.
-
Talking Points This Week: Tech Nerves, FII Buying, And A Faraway Banking Shock
The global markets are not shining this Diwali. The exception in the large markets is, India.
-
Midterm Rally Lasted A Day. The Hard Reality Of A Divided US May Last Two Years | Opinion
Between a contested AI boom, a debt ceiling that arrives in 2027 and a president with every incentive to act alone, the next two years may prove more volatile than the first day's rally suggests.
-
Blue Wave Will Derail the AI Trade but Won't Dismantle the AI Era | Unhedged Position
The Democrats' sweep of the US Congress will see politics collide with economic forces both over the long and short term.
-
It's Time To Take The GST Council's Bet On Trust Global
Payment records can prove India's services exports, and clear, proportionate rules can bring foreign digital sellers into the tax net.
-
Opinion | India at 38: From Innovation Overperformer to Innovation Powerhouse
India now has 453 VC-backed deep science startups, 18 of them late-stage, after 117 percent growth since 2020. Laurus Labs, at USD 9.3 billion, is the most valuable deep science company in any middle-income economy outside China.
-
Navigating Energy Crossroads: S Jaishankar's Call For Diversified Supply Chains At G20 Ministerial Meeting
As geopolitical fault lines continue to test maritime trade routes and commodity flows, Jaishankar's message remains pertinent: true economic resilience requires open markets, protected transit lines, and a genuine commitment to multilateral cooperation rather than coercion.
-
Indians Are Travelling, But Not Every Journey Is A Holiday | The Week In Whys
Pilgrims, patients and working women are the real travellers, and the system hasn't quite caught up with them.
-
Getting To Work Costs Women More | The Reason Why
It is not just about women paying more than men. It is about women paying much more in cities than in villages.
-
AI Bias In Investing Cannot Be Eliminated, But It Can Be Governed
Framing is a particularly important example as identical financial information presented in terms of gains rather than losses can lead an LLM to reach a different assessment.
