The information technology (IT) sector has been under the radar for a long time now. With concerns related to the impact of AI, slowing growth, generally poor earnings, stretched valuations, and tariff anxiety affecting the IT outsourcing companies in India, foreign institutional investors (FIIs) seem to be walking away from this sector.
FIIs have been net sellers of IT sector stocks for a long time now. During the June 2025 quarter, they sold IT stocks worth ₹16,483 crore, and in this quarter, they have already sold stocks of this sector worth ₹33,200 crore. (Source: NSDL)
Having said that, FIIs are not exiting all IT stocks. On the contrary, there are select IT stocks where FIIs have actually invested during the June quarter.
In this article, we will try to figure out what led FIIs to invest in these two IT stocks amidst all the volatility, and we will also explore 2 stocks that they offloaded heavily during the quarter.
IT Stocks Bought by FIIs
#1 Intellect Design Arena Limited (INTELLECT)
Intellect Design Arena Ltd. is known for developing cutting-edge financial technology for banking, insurance, and other financial services globally. It developed the first-ever transformation design center for financial technology in the world, the 8012 Fintech. It has presence in over 61 countries with over 6,000 associates and serves more than 500 customers globally.
During the June quarter, FIIs increased their stake by 2.97% points in this company, taking the total holding to 27.83%.
So, what influenced FIIs to invest more in this new-age tech company?
eMACH.ai – The game changer
Intellect developed eMACH.ai, which is an enterprise Connected Intelligence Platform that is based on First Principles Thinking. This platform has been a game-changer for the company. Currently, the platform has 454 ready-to-use Microservices on cloud, 2,385 APIs, and 730 events to make it the most composable, comprehensive, and Intelligent Open Finance Platform globally.
This platform is now used by 70% of the top banks in the world.
Perhaps with innovations like these, which are propelling the company’s growth, FIIs are betting more on this IT stock, even when they are a net seller in the overall sector.
New businesses on the way
During Q1FY26, the company won 17 new deals and 15 digital transformation go-live projects, which is quite interesting, especially when the entire Indian IT market is worried about Trump’s tariffs affecting the outsourcing businesses.
Out of these deals, two major ones are related to the eMACH.ai platform –
- A Tier One Canadian Multinational Bank selected the platform for its core banking and payments business to expand in the US
- San Francisco-based global financial services firm selected the platform for liquidity management
The company already has projects worth ₹11,300 crore in the pipeline, with ₹9,200 crore in active opportunities.
Another globally accepted product of the firm is Purple Fabric, which garnered orders worth ₹800 crore within 60 days of its launch. It is the world’s first open business impact AI platform.
Coming to the financials…
The company witnessed a 15.7% growth in its sales Year-on-Year (YoY) during Q1FY26, from ₹606 crore in Q1FY25 to ₹702 crore. In sharp contrast, TCS grew revenues by a little over 1%, and Infosys by over 7%.
The net profit also jumped from ₹75 crore to ₹94 crore during the period, registering a 27% YoY growth. The corresponding numbers for TCS and Infosys were approximately 6% and 9%.
Premium valuation
The stock is trading at a price-earnings (P/E) ratio of 41x, which is higher than the industry median of 32.8x.
1-year Stock Price Chart of Intellect Design Arena Ltd.
#2 Sagility India Limited (SAGILITY)
Sagility India Ltd. is one of the new entrants in the IT sector in India. In just four years since its incorporation in 2021, the company has already captured a significant share of the US healthcare market. It offers tech-enabled solutions and services for the US-based healthcare providers and health insurance payers.
During the June 2025 quarter, the FIIs increased their stake in this company by 2.6% points, taking the total holding to 6%.
So, what could have made FIIs invest more in this Healthtech provider?
Delivering value using AI
While many are perceiving Artificial Intelligence (AI) as a threat to their business or jobs, this Healthtech provider is creating value with AI. It has also deployed 18 AI-based use-cases for 8 different clients, and another 15 are in the pipeline. Some of the most popular use-cases include –
- Nurse Assist helpsinoffering clinical reviews using automated understanding and application of medical necessity guidelines across unstructured medical records
- Appeals Assist, which helps in classifying appeals, extracting information, and decision-making to improve the star ratings of the healthcare providers and payers.
New orders and clients
During the June 2025 quarter, Sagility won 18 new expansion projects from existing clients and 4 new clients. The potential annual contract value is around ₹282 crore.
The company has also received an offer for setting up a Global Compliance Center (GCC) for an existing client on a Build-Operate-Transfer model.
Coming to the financials…
The sales of the company increased from ₹1,223 crore in Q1FY25 to ₹1,539 crore in Q1FY26. Growing at 25.8% YoY.
The net profit jumped from ₹22 crore in Q1FY25 to ₹149 crore in Q1FY26, growing at 566% YoY.
Fair valuation
The stock is trading at a PE of 32.7x, while the industry median is slightly lower at 32.2x; however, the Price-earnings to growth (PEG) is at 0.11, way lower than the industry median of 0.62.
Since Inception share price chart of Sagility India Ltd. (Since Nov’24)
IT Stocks Sold by FIIs
#1 Tanla Platforms Limited (TANLA)
Tanla Platforms Ltd. offers cloud communication services that help businesses communicate with their customers and prospects. The company is a leading Communication Platform as a Service (CPaaS) business with a 35% market share in India.
During Q1FY26, FIIs offloaded this IT stock the most, decreasing their stakes by 3.08% points, which made the total holding fall to 7.31% at the end of the quarter.
This decline, perhaps, is a result of the declining net profit of the company, even when the sales grew marginally during the quarter.
Declining Numbers
Sales at Tanla increased marginally from ₹1,002 crore in Q1FY25 to ₹1,041 crore in Q1FY26, growing 3.8% YoY. However, the net profit fell from ₹141 crore in Q1FY25 to ₹118 crore in this June quarter, declining by 16% YoY.
The enterprise communications business of the company declined by 7.5% YoY from ₹184 crore in Q1FY25 to ₹170 crore in Q1FY26. However, its digital platforms business grew by 5.8% YoY from ₹86 crore to ₹91 crore during the period.
Challenges
The declining interest of FIIs could also be a result of the challenges faced by the company. The pricing pressure in the domestic SMS business has been hampering the business growth for a long time.
Regulatory delays, which are affecting their ValueFirst acquisition, can be another concern for the investors.
Moreover, aggressive growth aspirations of the company, for which they are rapidly investing in new technology like an AI-native platform, Rich Communication Services (RCS) global rollout, and others, are hampering the margins, which might be concerning to the investors again.
Cheap Valuation
The stock is trading at a PE of 19.9x, while the industry median is 33.2x, indicating a cheap valuation of the stock. The fact that exits are happening in spite of a cheap valuation warrants a deeper dive into the challenges being faced by the company.
1-Year Share Price Chart of Tanla Platforms Ltd.
#2 Coforge Limited (COFORGE)
Coforge Ltd. is engaged in offering end-to-end software solutions and services. It is one of the top 20 software exporters in India with a solid clientele that includes names like British Airways, SEI Investments, SITA, ING Group, and more. It has subsidiaries across the globe and a partnership with other giant IT companies worldwide.
FIIs reduced their stakes in this company by 2.79% points during Q1FY26, which took the total holding down to 37.42%, which is still one of the highest in the IT sector.
It is quite surprising that FIIs are offloading one of their favorite IT stocks. And that too when the company has been delivering growth continuously.
The sales of the firm went up from ₹2,357 crore in Q1FY25 to ₹3,689 crore in Q1FY26, which is a whopping 56% rise.
The net profit for the period grew by a massive 88% YoY, that is, from ₹139 crore in Q1FY25 to ₹356 crore. The EPS also went up from ₹3.99 to ₹9.49 during the period.
So, what went wrong that made FIIs sell this stock?
It is perhaps its stretched valuation.
The stock is trading at a PE of 62.3x, which is way higher than the industry median of 32.7x. Even the PEG ratio is at 9.54, while the industry figure is just 0.92.
What’s ahead for the IT giant?
Coforge won orders worth ₹4,462 crore in Q1FY26, which includes five mega deals. Their total order book, which is executable over the next one year, is at ₹13,640 crore. As per management comments, this is a 47.7% YoY growth in the orders pipeline.
Management thus expects the margins to remain strong in FY26 and organic growth to continue. For FY27, they are targeting to achieve revenues of ₹17,600 crore, and they see no hurdles in the way of achieving the same.
1-Year Share Price Chart of Coforge Ltd.
Wrapping up
FIIs are not just selling IT sector stocks, but they are actually reshuffling their IT stock portfolio, as it seems from their June quarter’s key picks and the exits. As FIIs are still offloading IT stocks in this quarter, it will be interesting to see whether they hold on to the stocks bought in Q1FY26 or include some other stocks while selling off the ones they have.
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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