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Infosys, TechM Lead Motilal Oswal's IT Buy List
5 Jan
Summary
- Motilal Oswal names Infosys, Tech Mahindra, Coforge, Hexaware as top IT stock picks.
- Growth expected to remain steady until January 2026, with AI driving future acceleration.
- Q3 IT growth projected between 0.3% and 2.3% for large caps, midcaps between -2.5% and 3.5%.
Motilal Oswal's latest analysis highlights Infosys and Tech Mahindra as top large-cap IT stock choices, with Coforge and Hexaware Tech leading among mid-caps. The firm anticipates demand will remain steady, with incremental spending cautious until January 2026 due to client budget resets and uncertainty surrounding new technology cycles. A meaningful acceleration in the IT sector is projected for the second half of FY27 and FY28, propelled by scaled AI service deployments.
For the upcoming third quarter, Motilal Oswal forecasts modest sequential growth in constant currency terms, ranging from 0.3% to 2.3% for large-cap IT companies. Mid-cap firms are expected to demonstrate stronger performance, with growth estimates between -2.5% and 3.5%. This period is characterized by seasonal furloughs, which are expected to impact growth, but the market is looking beyond these short-term effects towards future demand signals.
The brokerage sees AI as a pivotal driver for future growth, with early signs of AI strategy development evident through investments, acquisitions, and partnerships. Demand for AI services is expected to gain significant traction by calendar year 2026. Individual company outlooks suggest Infosys and Tech Mahindra are poised for steady performance, while Coforge and Hexaware Tech are also favored for their growth potential in the evolving IT landscape.
