2 hrs ago
Kotak Names Tech Mahindra, Coforge, Sagility, Indegene Top IT Picks
Kotak Institutional Equities shared its expectations for the next quarterly results from technology companies.
It expects most large IT companies to have only small growth.
The brokerage says weak business conditions and AI-related price pressure may hold back performance.
HCLTech is expected to grow the most among the large companies discussed.
Tech Mahindra is Kotak’s favorite large-company stock.
Coforge is expected to benefit from large deals and strong execution.
Sagility is expected to perform better than its peers.
Indegene is expected to grow across both of its main business segments.
Kotak Institutional Equities expects a muted Q2FY27 performance from most large IT companies because of weak demand and AI-related deflation.
HCLTech is projected to lead large-cap growth with 2% organic sequential growth, while Infosys and Tata Consultancy Services are forecast at 1.1% and 0.5%.
Tech Mahindra is Kotak’s preferred large-cap pick, supported by the Orange deal and previous deal wins, despite lower Pininfarina revenue.
Coforge is expected to deliver 4.5% organic sequential growth, while Sagility is forecast to grow 1.8% and outperform peers.
Kotak also prefers Indegene, expecting 2.7% constant-currency sequential growth and broad-based performance across its enterprise segments.
- Who
- Kotak Institutional Equities and the IT companies it reviewed, including Tech Mahindra, Coforge, Sagility, Indegene, HCLTech, Infosys, and Tata Consultancy Services.
- What
- The brokerage issued expectations and preferred stock picks ahead of the Q2FY27 IT earnings season.
- Where
- When
- Ahead of the Q2FY27 earnings season.
- Why
- Kotak expects weak demand and AI-related deflation to produce muted sector growth, while selected companies may benefit from deals, acquisitions, or resilient client demand.
Key facts
- Expected sector trend
- Muted Q2FY27 growth for most large IT companies.
- Large-cap growth leader
- HCLTech, with projected organic sequential growth of 2%.
- Preferred large-cap pick
- Tech Mahindra.
- Preferred smaller and mid-sized picks
- Coforge, Sagility, and Indegene.
- Coforge growth forecast
- 4.5% organic sequential revenue growth.
- Sagility growth forecast
- 1.8% organic sequential revenue growth and 11.6% year-over-year growth.
- Indegene growth forecast
- 2.7% constant-currency sequential growth.
Quotes
Kotak Institutional Equities
Brokerage providing the IT-sector earnings outlook
“Underlying organic growth remains modest, reflecting AI-led deflation and a weak demand environment. The Optimum Healthcare acquisition will contribute ~50 bps through a full-quarter consolidation. We expect stable margins.”
financialexpress.com
“The company has indicated a record number of large deals signed during the quarter, which should support growth in subsequent quarters. The deal pipeline remains strong. We expect TCV of deal wins in excess of US$800 mn.”
financialexpress.com
Sources
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