The Information Technology (IT) sector has been undergoing a structural shift with the advent of Artificial Intelligence (AI). The irony is that AI is a product of the IT sector itself. GenAI has already disrupted the entire IT industry, making IT giants rethink their strategies.
On top of that, the geopolitical tension, the ongoing tariff war between the US and India, the US imposing exponential H-1B visa fees, and the poor earnings of the IT companies led the Nifty IT index to slump 11.67% in the past year. (Source: NSE)
Domestic Institutional Investors (DIIs) are perhaps looking beyond all these challenges and continuously pouring money into the largecap IT companies.
Are they buying the dip? Or are they looking beyond the near-term challenges?
Let’s try to decode DII’s move in these four IT giants, where they increased their stake by over 2% points during Q2FY26.
#1 Persistent Systems Limited (PERSISTENT)
Persistent Systems Ltd. is one of the leading companies when it comes AI-led product and platform engineering and business modernization services. It offers solutions such as design-led transformation of enterprises, cloud-enabled enterprise modernization, data and artificial intelligence solutions, and automation for scaling businesses.
Persistent company has a global presence across varied industries, especially in the Banking, Financial Services, and Insurance sector (BFSI), healthcare and life sciences, software and hi-tech industries, and in emerging industries.
DIIs increased their stake in this company by 2.83% points during Q2FY26, taking the total holding to 30.6% at the end of the quarter.
The Fortune 50 Factor: Market Transformation
Persistent Systems has been working with market leaders in different sectors to transform how the entire industry looks and how it works. It is a partner to 20 out of the Fortune 50 companies across the globe.
Perhaps this approach of the company has helped them scale their revenues across sectors as well. Each of the three sectors they broadly cater to is witnessing sharp growth in revenue quarter-on-quarter.
Shift towards AI-led Platform-driven Strategy
Persisten has developed and operationalised platform-based services such as –
- SASVA TM – This is an AI-led software development and data lifecycle platform
- iAURA – This platform is for document intelligence or for data management using Agentic AI-driven solutions
- For scaling businesses of its clients, it has been working on strengthening collaboration and co-creating technology-specific agents.
- Shared expertise and integrated platforms are another measure they are implementing for scaling enterprises.
In short, Persistent is developing solutions that use AI responsibly to enhance productivity and expand businesses.
Financials
Sales of the company went up from ₹2,897 crore in Q2FY25 to ₹3,581 crore in Q2FY26, registering a 23.6% year-over-year (YoY) growth. Net profit for the period surged by 45% YoY from ₹325 crore to ₹471 crore.
The Zero-Debt Advantage
Another factor that might have pulled the DIIs to increase stake is its debt-free status. The company has had negligible long-term and short-term debt for the past two years.
Valuation
The stock is trading at a price/earnings (PE) ratio of 59.7x, while the industry median is 26.8x only, indicating a premium valuation.
1-year Share Price Chart of Persistent Systems Ltd.
#2 Coforge Limited (COFORGE)
Coforge Ltd. is one of the top software exporting companies in India, specializing in technology and digital transformation services and solutions. It offers consulting services, support solutions, and implementation services for analytics, machine learning, cybersecurity, artificial intelligence, and cloud computing platforms.
DIIs increased their stake by 2.55% points during the July-September 2025 quarter, taking the total holding to a whopping 54.9% at the end of the quarter. Amongst Nifty IT stocks, this stock has the highest DII holding currently.
Large Orders in the Pipeline
This IT giant has received orders worth ₹4,592 crore during the quarter, along with the addition of 9 more clients to its solid clientele. The total orderbook executable over the next 12 months stood at ₹14,564 crore at the end of the quarter. This has increased 26.7% YoY from around ₹11,600 crore at the end of Q2FY25. During the quarter, it received five mega deals, mostly from large repeat clients.
Growth Across Segments, Sectors, and Geographies
Coforge has been spreading its wings across geographies with 57.9% of Q3FY26 revenue coming from American clients, while 28.9% coming from EMEA (Europe, the Middle East, and Africa), and the remaining 13.2% from the other parts of the world.
That’s not all, it caters to multiple sectors such as Banking and Financial Services, from which, during the quarter, 27.6% revenue was generated. This is followed by Travel, transportation, and hospitality services, from which it earned 23.3% revenue. From the insurance industry, it generated around 15.1% of its revenues, and 6.9% came from foreign government projects.
Financials
Sales of the company surged by 31.7% YoY, from ₹3,026 crore in Q2FY25 to ₹3,986 crore in Q2FY26. The net profit for the period went up from ₹234 crore to ₹425 crore, growing at 76% YoY.
Valuation
The stock is trading at a PE of 49.2x while the industry median is just 26.8x, indicating a premium valuation.
1-year Share Price Chart of Coforge Limited
#3 Tech Mahindra Limited (TECHM)
Tech Mahindra Ltd. offers an array of IT services, starting from consulting to customer experience and design services, AI & analytics, business process services, cloud and infrastructure services, enterprise applications, and more.
DIIs’ increased their stake in this IT giant by 2.51% points during the July-September quarter. Their holding now stands at 34.6%.
In its Stabilisation Phase
Tech Mahindra is rebuilding itself. The journey started from the end of FY24 when it came up with a three-year-long transformation process. It began with determining and defining the company structure and the business strategies that were implemented through FY25.
The company made significant investments across key markets, broadened its services, introduced turbocharged programs for accounts/ clients’ growth, front-end integration of portfolio companies, and more.
Tech Mahindra is now looking towards cost efficiency.
In FY27, this total transformation process is expected to reap returns through long-term structural mix and continuous improvement.
AI Revolution
Tech Mahindra is one of the first System Integrators (SIs) that launched a Comprehensive Platform for Agentic AI development – TechM Orion in July 2025. Previously, it was the first to launch a comprehensive GenAI studio as well as a Large Language Model (LLM) from scratch.
Tech Mahindra is also recognised by the government for being a major contributor to the Indian AI Mission, which is for making India technologically self-reliant and using AI responsibly.
During the July-September quarter, the company also entered into a partnership to launch the Large Telco Model (LTM), which is a key aspect of its “Operations for the Future” program. This move is expected to transform the entire firm’s operational efficiency.
Financials
Sales went up from ₹13,313 crore in Q2FY25 to ₹13,995 crore in Q2FY26, growing at 5.1% YoY. The net profit, however, dipped by 4% during the quarter from ₹1,258 crore to ₹1,202 crore.
This perhaps indicates that DIIs are looking beyond quarterly numbers and are probably more vested in the long-term growth potential.
Valuation
The stock is trading at a PE of 35.2x, which is higher than 26.8x as the industry median, indicating a higher valuation.
1-year Share Price Chart of Tech Mahindra Ltd.
#4 Infosys Limited (INFY)
Infosys Ltd. is the 2nd largest IT company in the country after Tata Consultancy Services (TCS) by market capitalisation. It offers advanced technology solutions, consulting, digital services, and outsourcing as key services and solutions with a presence across the globe.
DIIs increased their stake by 2.11% points during Q2FY26, taking the total holding to 41.5% at the end of the quarter.
The ₹14,400 Crore NHS Win
During the July-September quarter, the IT giant signed a mega deal with the National Health Service (NHS), the United Kingdom, worth around ₹14,400 crore. This is for a complete transformation of the NHS system, and for AI integration as the core idea.
Apart from the mega deal, the company won 23 large deals in the quarter, and the total contract value at the end of the quarter stood at ₹28,000 crore, out of which 67% is new deals.
Positioning as AI Transformation Leader
Infosys has generated over 2,500Generative AI and AI projects, along with 200 or above agentic AI projects. As per the management’s comments, the company has already produced over 2.5 crore lines of code using Generative AI, positioning itself as a key player in the industry.
They offer two AI frameworks to the clients –
- services.ai: This isfor reimagining IT services and operations with AI agents and human agents as well
- client.ai: This is for complete enterprise and business transformation
Financials
Sales grew from ₹40,986 crore in Q2FY25 to ₹44,490 crore in Q2FY26, at 8.55% YoY. The net profit for the period surged from ₹6,516 crore to ₹7,375 crore, registering a 13% growth YoY.
Valuation
The stock is trading at a PE of 23.9x, lower than the industry median of 26.8x, indicating a cheaper valuation.
1-year Share Price Chart of Infosys Ltd.
Wrapping Up
The rationale behind DIIs’ increasing stake in these IT giants, perhaps, is linked to the long-term potential of the businesses and the shift towards AI integration. The long-term perspective seems to be strong enough for the DIIs to look ahead of the short-term conflicts, which are taking a toll on the overall IT sector. However, only time could tell whether the long-term prospects are justifiable enough or not, and whether DIIs continue with their holdings in these IT companies.
Disclaimer:
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.
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.
The website managers, its employee(s), and contributors/writers/authors of articles have or may have an outstanding buy or sell position or holding in the securities, options on securities or other related investments of issuers and/or companies discussed therein. The content of the articles and the interpretation of data are solely the personal views of the contributors/ writers/authors. Investors must make their own investment decisions based on their specific objectives, resources and only after consulting such independent advisors as may be necessary.