Archive · 2 Jul 2025
IT Sector Faces Investor Pessimism, But Opportunity May Arise
Right now, investors don't seem too excited about Indian IT companies, with foreign investors owning the least amount of shares in 13 years.
However, a financial company called BNP Paribas thinks this could actually be a good thing – they believe it could be a chance to buy.
They think companies like Infosys and Persistent will do well soon, while others like TCS and Wipro might struggle a bit.
Plus, companies overseas are seeing growth, which is a good sign.
BNP Paribas is optimistic about some IT companies but warns about others.
FII holdings in the Indian IT sector have fallen to a 13-year low, alongside a decline in domestic institutional ownership.
BNP Paribas suggests the low investor sentiment could signal a buying opportunity, as low holdings have historically preceded sector outperformance.
Infosys and Persistent Systems are expected to perform well in Q1FY26, while TCS and Wipro may see weaker results.
Accenture's guidance signals potential organic growth rebound, with client conversations shifting from 'pause' to 'leapfrog' initiatives.
BNP Paribas maintains a positive outlook on Infosys, TCS, Persistent Systems, and HCL Technologies, but is wary of Tech Mahindra and Wipro.
- Who
- BNP Paribas.
- What
- Investor sentiment and outlook for the Indian IT sector.
- When
- Q1FY26 and FY26.
- Where
- India.
- Why
- Due to low investor holdings, potential outperformance, and company performance projections.
Bearish Indicators
Bullish Indicators
Investor Sentiment
Bearish Indicators
Declining FII and DII holdings
Bullish Indicators
Historically, low investor holdings have preceded IT sector outperformance.
- Analyst
- BNP Paribas
- Sector
- Indian IT
- FII Holding
- 13-year low
- Favored Stocks
- Infosys, Persistent Systems, HCL Technologies
- Challenged Stocks
- TCS, Wipro, Tech Mahindra
- Dividend Yield
- 3.2%
Sources
IT stocks: FII holding at 13 year lows. Contrarian buy signal or more pain ahead?
IT stocks no longer 5 year buy and hold compounding picks, says HSBC
Sensex ends down 288 points dragged by HDFC Bank and foreign fund outflows
Markets end lower; HDFC Bank, foreign fund outflows drag
Expert view: Nifty to give muted return in FY26; equities may not outperform bonds significantly, says Bhasin of Ambit
