IT Services - Poised To Come Out Strongly From Macro Troubles: Nirmal Bang's Thematic View

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Nirmal Bang Report

We are upgrading our stance on the Indian IT Services sector from ‘underweight' to ‘overweight.' We anticipate a robust double-digit EPS growth (17.5% compound annual growth rate) from FY24 to FY27E, driven by,

1. solid trailing twelve months deal wins of ~$100.7 billion as at Q1 FY25, up 16.6% YoY despite the downturn;

2. stabilised margins

3. sustained medium to long-term opportunities in Digital Transformation, especially in Cloud, cybersecurity and GenAI;

4. enhancing client's operations across verticals; and

5. Potential positive consumer sentiment from expected Fed rate cuts and likely unlocking of client spending.

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