Stocks in focus: According to brokerage firm Nuwama Institutional Equities, the September quarter results for India’s IT sector may be better than expected. Brokerage says that there was a pressure of tariffs involving tariffs in the first quarter, but the results of companies in the second quarter may show signs of stability and recovery. Nuwama estimates that the revenue of almost all IT companies involved in his coverage saw growth on a quarterly basis. Brokerage has projected only a slight decline in the revenue of Birlasoft and Jansar.
Brokerage says that the atmosphere at the global level regarding the IT sector still remains challenging. Especially after the US has increased the fee of H1B visa. Despite this, careful statements are expected from IT companies and no negative outlook is expected from them.
Nuwama said, “The recent decline in IT shares has made the risk-relieved ratio attractive. We are positive from medium to long-term perspective on the IT sector.”
How will Largecap IT companies perform?
Nuwama says that the revenue growth in Largecap IT companies of Infosys can be 1.8 per cent on a quarterly basis. After this, HCL Tech’s revenue growth is estimated to be 1.5 percent and Tech Mahindra’s revenue growth is 0.8 percent. Revenue growth of TCS and Wipro can be 0.2% and 0.1% respectively on a quarter basis.
Brokerage said it hopes that Infosys will maintain the target (1-3%) of its revenue growth for FY26. HCL Tech is also expected to maintain its 3-5% outlook. Brokerage said that all Tier-1 companies are expected to maintain margin estimate.
Midcap IT companies can do outperformer
Nuwama says that the performance of midcap IT companies may be far better in the September quarter. Coforge is expected to be at the forefront. Brokerage has predicted 6 percent on the basis of revenue growth in Coforge’s Constant currency. At the same time, this revenue growth can be 3.7% and 3.2% respectively for percentage systems and hexavier technologies. Apart from this, the revenue growth of Ltimindtree and MPASIS is estimated to be 1.9% and 1.3% respectively on a quarterly basis.
Nuwama said in the report, “Tier-2 companies are continuously showing strong growth and our top pics remain Ltimindtree, Coforge, Persistent, Mphasis and Hexaware.”
ER & D and Smallcap companies
Companies related to engineering and research and development may also see a slight increase in the performance. Nuwama said that LTTS’s revenue growth is expected to increase by 1.5 percent on a quarterly basis and 0.3 percent of Cyient. However, these companies may see pressure under the weakness of the automobile sector.
Talking about small companies, it has expected an increase of 2.2 percent on a quarterly basis in the revenue growth of the firstsource. At the same time, companies like Birlasoft and Zensar have predicted a decline of 0.5 percent and 0.1 percent respectively in the income.
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