Indian IT Sector Muted Growth Forecast

Nuvama Institutional Equities has released a report forecasting muted growth for the Indian Information Technology sector in the March quarter. This subdued performance is attributed to ongoing geopolitical tensions in West Asia, the anxiety surrounding generative AI, and potential US tariffs. While Tier-1 companies like Infosys and HCLTech are expected to see declines due to seasonal factors, Tier-2 firms such as Persistent Systems, Mphasis, Coforge, and LTIMindtree are projected to outperform. Despite global trade disruptions, margins for Indian IT companies are expected to remain intact, largely supported by a nearly 5% depreciation of the India — Indian rupee since the onset of the Gulf War. Nuvama Institutional Equities maintains a 'buy' rating on the top ten IT services companies, anticipating long-term performance despite near-term volatility.