India's mid-cap IT sector continues to outshine its large-cap counterparts, driven by sharper AI adoption, BFSI momentum, and robust deal pipelines, signaling strong medium-term growth prospects.
NDTV Profit's special research section collates quality and in-depth equity and economy research reports from across India's top brokerages, asset managers and research agencies. These reports offer NDTV Profit's subscribers an opportunity to expand their understanding of companies, sectors and the economy.
-
Indian Markets Turning Corner After Two Tough Years, Says Sandeep Tandon -
NDTV Profit Ignite 2026: Experts See Opportunity In Equities, Stay Bullish For Long-Term -
Buy Right, Sit Tight Does Not Work for Individual Stocks, Says Dinshaw Irani -
'Worst Is Behind': Quant MF Sees Market Bottom, Flags 'Extreme Euphoria' In Midcaps -
India's Mutual Fund Industry Could Become A $1 Trillion Opportunity, Say Fund Managers -
'Foreign Investors Are Baraatis': Raamdeo Agrawal's Take On LTCG Tax -
Stay Invested Through Market Cycles: Raamdeo Agrawal at NDTV Profit Ignite -
Ramesh Damani Remains Bullish On India For Next 20-30 Years, Sees Bargains Amid Market Weakness -
CAS Came After A Long Consultation Process: SEBI Chairman Tuhin Kanta Pandey AT NDTV PROFIT IGNITE -
Aim To Cut FPI Onboarding Time From Mth To Five Days: SEBI Chairman Tuhin Kanta Pandey AT NDTV PROFI
Anand Rathi Report
In Q1 FY26, the Indian IT sector delivered a soft performance, with tier-2 firms like Coforge outperforming large players in both revenue growth and execution. Largecap companies such as TCS, Infosys, and HCLTech were impacted by macroeconomic uncertainty that delayed discretionary spending, leading to muted growth.
Also Read | Layoffs Are Rising In Tech, But These Skills Are Helping People Unlock Better Pay
However, strong deal wins especially at Infosys and HCLTech indicates improvement in demand, prompting both firms to raise the lower end of their FY26 revenue guidance.
Tier-II players meanwhile maintained their strong growth outlooks. GenAI, cloud, and digital transformation remained key drivers of interest but monetization continues to lag as clients focus on pilots rather than scaled adoption. The absence of a new tech cycle further added to the deflationary pressure on legacy service lines.
Margins contracted across the board. Tier-1 companies were hit by wage hikes, low utilization, and upfront GenAI investments, while Tier-2 firms saw sharper declines due to pricing and volume softness. Despite margin pressures, firms continue to invest heavily in AI capabilities, platforms, and talent. Sector-wise, BFSI, telecom, and healthcare showed resilience while consumer and manufacturing were weak due to tariff-related concerns.
Global peers like Accenture and Cognizant raising guidance has added to optimism for a gradual H2 FY26 recovery led by GenAIdriven tech spending.
Click on the attachment to read the full report:
DISCLAIMER
This report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit.
Users have no license to copy, modify, or distribute the content without permission of the Original Owner.
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.
