3 IT stocks DIIs are buying aggressively amidst the IT sector slowdown

Slowdown in global technology spending, structural shift to artificial intelligence (AI), and companies periodizing budgets for AI automation have been dampening investors’ sentiments around IT stocks.

Nifty IT Index has declined by over 24.2% since the beginning of 2026, and by around 22% in the past year. (Source: NSE)

Having said that, domestic institutional investors (DIIs), in contrast to FIIs, bought select IT stock during the Jan-Mar 2026 quarter, raising their stake at a significant pace.

While two of the stocks are rare picks, the other one is a popular IT giant.

In this article, we will explore these three IT companies and try to understand the probable reasons that led DIIs to buy these stocks, defying sectoral headwinds.

#Mastek Limited: Leading With AI

AI has been disrupting the entire IT industry; however, Mastek Ltd. has been leading with AI by integrating intelligence across the tech solutions and operations it offers to the clients. Mastek helps organizations enhance their operations and efficiency via ethical, scalable, and domain-driven use of AI.

Though Mastek is not one of the popular IT companies’ names that you hear every day, this IT company has clients across the globe who are industry leaders. Some of the top clients of Mastek are Oracle, Salesforce, AWS, Microsoft, and others.

During Q4FY26, DIIs increased their stake in this company by 6.4% points, taking the total DII holding to 19.02% at the end of the quarter.

Q4 – The Quarter of Wins

One of the possible reasons why DIIs are loading up this IT stock could be back-to-back orders won by Mastek during the quarter.

Mastek entered into a contract with one of the leading Global Financial Services to develop the first AI Centre of Excellence in the UK. The company will lead the development, from designing and strategizing, to finally building the AI agents.

Another significant win for the company is the strategic engagement with the US Federal Health Authority for implementing a unified system for consolidating all the records of the patients.

Similarly, Mastek has engaged strategically with the UK’s National Health Authority as well for developing some digital products that can help in monitoring and preventing diseases.

There are a few other contracts from the healthcare sector that the company won during the quarter, such as from the Middle-Eastern Healthcare Authority, and others.

Mastek has entered into another strategic partnership with a leading Southeast Asian government-backed insurer for building a unified financial management platform.

Another significant win was for unifying 30 business systems into one single integrated Oracle platform. This order is from a global energy and logistics leader.

Increasing Order Backlog

At the end of March 2026, the company’s 12 months order backlog stood at ₹2,849.2 crore, up from ₹2,290.9 crore at the end of March 2025. This reflects a surge of 24.4% YoY basis in the order backlog.

As per management, the current orderbook has a significant share of orders from UK-based clients, and cumulative order from them offers a 3–5-year revenue visibility.

Financials & Returns

Coming to the financials, sales for FY26 stood at ₹3,698.8 crore, up from ₹3,455.2 crore, logging a 7.1% YoY growth.

Profit after tax (PAT) increased from ₹375.9 crore in FY25 to ₹404 crore during FY26, growing at 7.5% YoY.

Earnings per share (EPS) (diluted) grew from ₹120.7 in FY25 to ₹129.5 in FY26.

Return on equity (ROE) of Mastek stood at 15.6%, slightly lower than the industry median of 16.2%.

Having said that, this IT company offers regular dividends, and the current dividend yield is 1.4%, higher than the industry median of just 0.4%.

Still Trading Cheap?

The stock is trading at a price/earnings (PE) of 11.9x, which is way lower than the industry median of 20.6x. Even the price-to-book value (PBV) ratio is at 1.7x, lower than the industry median of 3.5x, indicating the stock might be trading relatively cheap.

1-Year Share Price Chart of Mastek Ltd.

#2 Hexaware Technologies Limited: Digital Engineering Play

Hexaware Technologies Ltd. is a global digital technologies provider via platforms like RapidX, Tensai^®, and similar platforms. The company helps businesses launch their new products, leveraging digital designs, custom software development, and other technologies.

Using AI and machine learning, Hexaware helps companies transform data into actionable insights for business planning and predictions.

The company serves financial services providers, healthcare and insurance businesses, the manufacturing and retail sector, banking sector, and independent software vendors, platforms, and professional services providers, such as tax, audit, accounting consultants, advertising, and similar services.

DIIs raised their stake by 3.73% points in Hexaware during the Jan-Mar 2026 quarter, taking the total holding to 15.04% at the end of the quarter.

The AI Pivot

Hexaware has been scaling its AI business and has started 12 new business verticals using AI.

During the quarter, the company also launched an AIOps reasoning platform, which is a part of the latest Tensai^® platform.

Apart from these, Hexaware is actively integrating AI into data and other IT operations to offer higher productivity to the clients.

Key Deals Wins

During the quarter, the company won multiple deals, amongst which some of the crucial ones include a deal from a large audio equipment manufacturer for digital ITO, cloud migration, and enhancing customer experience.

Hexaware also won multiple consolidation deals from leading banks across the globe and other global professional services.

Another significant deal during the quarter was for developing an Agentic Application Maintenance and Support (AMS) for a leading digital workspace platform.

Upcoming Acquisition

Recently, on 20 May 2026, the company’s board approved the acquisition of Consulting Professionals Services Holdings Ltd., along with Consulting Professionals Services Ltd., a wholly owned subsidiary. This acquisition will be done via Hexaware’s wholly owned subsidiary, Hexaware Technologies UK Ltd.

The total consideration for the deal has been agreed at around ₹138 crore (GBP 11 million).

CPS is a consulting services firm specializing in technology consulting and a professional services firm offering high-value consultation related to regulatory compliance, governance, and risks, business transformation, and technology infrastructure to companies listed in the UK.

Financials and Returns

Sales for CY25 stood at ₹13,430 crore, up from ₹11,974 crore generated during CY24, logging a 12.16% YoY growth.

** Note: Hexaware follows a January to December Calendar or Current Year (CY) calendar.

Profit grew by 16.6% YoY from ₹1,174 crore to ₹1,368 crore during the period. The EPS grew from ₹19.4 to ₹22.4 per share.

Sales for Q1CY26 stood at ₹3,613 crore, growing at 12.6% YoY from ₹3,208 crore of sales generated during the corresponding quarter last year.

Profit during this Jan-Mar 2026 quarter stood at ₹352 crore, up from ₹327 crore recorded during Q1CY25, growing at 7.6% YoY.

ROE stood at 24.9%, while the industry median is 16.2%, indicating that the company is offering relatively better returns than most of its peers.

The dividend yield of the company is also relatively higher than its peers. While Hexaware is offering a dividend yield of 2.24%, the industry median is just 0.43%.

Trading at a premium?

The stock is currently trading at a PE of 21.4x, slightly above the industry median of 20.6x. However, the PBV ratio is around 5x, higher than the industry median of 3.5x, indicating the stock is relatively expensive .

1-Year Share Price Chart of Hexaware Technologies Ltd.

#3 Infosys Limited

Infosys Ltd., the second largest IT company by market capitalization in India, is the final stock on this list.

Infosys is the leading technology consulting company, offering next-gen digital services for transforming businesses digitally. Apart from the new age digital services, the company’s core offerings include application management services, product engineering, proprietary application development, and similar services and solutions.

During Q4FY26, DIIs increased their stake by 2.1% points in this stock, taking the total holding to 43.2% at the end of the quarter.

In fact, DIIs have been increasing their stakes steadily in this IT stock amidst the sectoral slowdown. Out of the last 10 quarters, DIIs increased their stake in this company in 9 quarters, except for Q3FY26.

A Year of Large Deals

During FY26, Infosys bagged some of the largest deals, which perhaps is one of the reasons that is driving this interest from DIIs . Throughout the year, the company bagged 19 large deals.

The total contract value of the deals stood at around $15 billion, up by 28% YoY. Out of this, during Q4FY26, the company received deals worth $3.2 billion.

Reaching $20 Billion Milestone

During FY26, the total revenue of the firm crossed a major milestone of $20 billion.

The financial services segment, communications, and manufacturing segments outperformed during the fiscal year, helping the company touch the revenue milestone.

Management is anticipating another 1.5% to 3.5% increase in revenue during FY27. Having said that, the management also indicated the challenging macro environment, which might affect the revenues of the company.

New Partnerships at Play

Infosys partnered with some of the top AI players in the industry during the fiscal year, which further boosted its performance and perhaps attracted the DIIs as well.

The company joined hands with OpenAI, Anthropic, NVIDIA, Microsoft, Google Cloud, Google Gemini, Intel, and AWS.

Financials & Returns

Coming to the financials, overall sales of the company went up from ₹1,62,990 crore in FY25 to ₹1,78,650 crore in FY26, logging a 9.61% YoY growth.

Profit went up from ₹26,750 crore to ₹29,474 crore during the period, growing at 10.2% YoY.

This led to EPS increasing from ₹64.32 to ₹72.59 during the fiscal year.

Infosys, being one of the largest companies in the IT sector, offers one of the highest ROEs at around 31.9%, while the industry median is 16.2%.

The dividend yield of Infosys is also relatively higher than most of its peers at 4.09%, while the industry median is just 0.43%.

Is Infosys Trading Cheap?

The stock is trading at a PE of 15.8x, lower than the industry median of 20.6x, indicating a relatively cheaper valuation. However, the PBV ratio is 5.1x, higher than the industry median of 3.5x.

1-Year Share Price Chart of Infosys Ltd.

Final Thoughts

Even amidst a muted IT sector, DIIs buying these select stocks at such an aggressive pace perhaps indicates their conviction.

It may be wise to add these stocks to your watchlist to see whether this conviction plays out as anticipated in the time to come.

We have relied on data from www.Screener.in throughout this article. Only in cases where the data was not available have we used an alternate, but widely used and accepted source of information. 

Disclaimer:

The purpose of this article is only to share interesting charts, data points, and thought-provoking opinions. It is NOT a recommendation. If you wish to consider an investment, you are strongly advised to consult your advisor. This article is strictly for educative purposes only. 

Maumita Mitra is a seasoned writer specializing in demystifying the world of investment for a broad audience. She has a keen eye for detail and a knack for explaining complex financial concepts in the simplest manner possible. 

Disclosure: The writer and her dependents do not hold the stocks discussed in this article. 

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