The Indian IT sector saw a robust rally on May 23, with the Nifty IT index rising nearly 2%, after global brokerage firm Bernstein projected a positive outlook for the industry. The surge comes on the back of strong deal activity, AI adoption, and a stable demand environment.
According to Bernstein, the Indian information technology sector is set for a sharp earnings revival, with deal momentum showing impressive traction. This upbeat sentiment lifted IT stocks across the board, making the Nifty IT index the top sectoral performer for the day.
At 10:25 AM, the Nifty IT was up by 1.8%, trading at 37,711.40, with all constituent stocks in green. Leading the rally were Oracle Financial Services Software, Coforge, and Persistent Systems, which rose between 1.5% to 3%.
Bernstein’s Bullish Outlook on IT Sector
Bernstein highlighted that earnings growth is expected to improve in the current fiscal year, compared to FY25. With rising guidance from IT companies, the brokerage anticipates a stronger revenue trajectory heading into FY27.
The firm emphasized that large IT players like Infosys and TCS continue to see a stable business outlook, with clients not anticipating any sudden demand slowdown. Artificial Intelligence (AI) adoption has also played a key role, showing promising early results, especially in the financial services segment, where IT budgets are higher.
Deal activity has been particularly strong, with the March quarter of FY25 reporting a total contract value of $21.9 billion, led by giants like TCS, Infosys, and HCL Technologies.
Stock Ratings and Target Revisions
In its latest report, Bernstein maintained an ‘outperform’ rating on several IT services firms including Infosys, Tata Consultancy Services (TCS), Tech Mahindra, and Coforge, while revising their target prices upwards:
Infosys: Target raised to ₹1,760 (from ₹1,680)
TCS: Target revised to ₹3,910 (from ₹3,740)
Tech Mahindra: Target hiked to ₹1,680 (from ₹1,480)
Coforge: Target increased to ₹9,530 (from ₹8,630)
Interestingly, KPIT Technologies retained its ‘outperform’ rating, though Bernstein slightly reduced the target price to ₹1,390 from ₹1,400. On the other hand, L&T Technology Services was rated ‘underperform’, with a lowered target of ₹3,990 from ₹4,150.
Sector-Wide Optimism
Bernstein’s latest note has reignited investor confidence in the IT sector, underlining that strong deal wins and AI integration are likely to drive a meaningful earnings recovery. The focus on mid-cap IT firms like Coforge and Persistent Systems also suggests a broader participation in the sectoral revival.
With a stable global demand environment and continued technological transformation, the outlook for Indian IT remains highly promising as we progress through FY26.
