Kotak Institutional Equities has named Tata Consultancy Services, Infosys, Tech Mahindra and Coforge as its key picks in India’s information technology services space, even as it cautioned that the March 2026 quarter remained muted and growth visibility into FY27 stayed constrained.
In its April 1, 2026 sector report, the brokerage set out company-specific expectations on revenue growth, deal activity and margins, while retaining a neutral stance on the broader sector amid cautious client spending and rising pressure from generative artificial intelligence-led efficiencies.
IT Sector: Kotak on near-term challenges
The report pointed to a divergence between near-term performance and underlying trends, with currency movement supporting earnings even as demand remained uneven across verticals and geographies.
It added that the March 2026 quarter would likely see limited sequential growth across companies, though year-on-year performance may show improvement.
“Muted \Q4FY26 revenue growth across many companies in the sector, although the yoy growth profile should improve for several companies,” Kotak Institutional Equities said in the report.
Within this backdrop, the brokerage outlined detailed expectations for Tata Consultancy Services, Infosys, Tech Mahindra and Coforge, focusing on execution trends, deal pipelines and margin drivers during the March 2026 quarter and the outlook for FY27.
Kotak Institutional Equities on Tata Consultancy Services
Kotak Institutional Equities said Tata Consultancy Services is expected to report about 1.2% constant currency growth for the March 2026 quarter, with 0.8% driven by organic performance and the rest coming from the Coastal Cloud acquisition. The brokerage said international markets are likely to lead growth during the quarter, while India business is expected to see a marginal decline in the same period.
Margins for the March 2026 quarter are expected to remain stable, as the benefit of rupee depreciation during the quarter offsets the impact of wage revisions and acquisition-related costs. Kotak Institutional Equities estimated deal wins in the range of $9 billion to $10 billion for the March 2026 quarter, lower compared with the same quarter last year due to a higher base.
The report noted that there were no mega deal closures during the March 2026 quarter, which affected near-term momentum.
“Focus will be on company’s renewed aggression and investments to accelerate growth,” the report said.
Kotak Institutional Equities said attention remains on developments over the past three months in agentic artificial intelligence, timelines for convergence of growth with peers and progress on data centre investments and inorganic strategy.
Kotak Institutional Equities on Infosys
Kotak Institutional Equities said Infosys is expected to report a sequential revenue decline of around 1% in the March 2026 quarter, mainly due to fewer billing days and seasonal factors during the period. The brokerage said margins during the quarter are likely to remain stable, with gains from rupee depreciation during the quarter offset by higher visa-related costs.
The brokerage estimated large deal wins in the range of $2.5 billion to $2.75 billion for the March 2026 quarter, broadly stable compared with the same period last year. For FY2027, Kotak Institutional Equities said Infosys is expected to guide for revenue growth in the range of 3% to 5%, including contribution from the Versent acquisition, with organic growth estimated between 2.25% and 4.25%.
“We believe Infosys will guide for 3-5% growth in revenues including Versent acquisition,” the report said.
The report added that client decision-making timelines observed in recent months, movement of generative artificial intelligence-led programs from pilot to production and willingness to take up large transformation deals will influence performance in FY2027.
Kotak Institutional Equities on Tech Mahindra
Kotak Institutional Equities said Tech Mahindra is expected to report flat revenue for the March 2026 quarter, as the benefit of earlier pull-forward in the manufacturing vertical during the December 2025 quarter normalises. Despite muted revenue during the March 2026 quarter, margins are expected to improve by about 60 basis points, supported by operational efficiencies and favourable currency movement during the period.
The brokerage estimated net new deal wins of about $1.1 billion for the March 2026 quarter, reflecting strong growth compared with the same quarter last year, supported by a large deal and traction across verticals. However, foreign exchange losses during the quarter are expected to weigh on net profit growth.
“Deal momentum in other verticals is also strong,” the report said.
Kotak Institutional Equities said focus remains on the company’s medium-term targets, particularly whether it continues to expand margins or reinvests to drive growth, along with performance in the financial services vertical and its approach to generative artificial intelligence in the coming quarters.
Kotak Institutional Equities on Coforge
Kotak Institutional Equities said Coforge is expected to deliver one of the strongest performances in the March 2026 quarter, with about 2.2% sequential growth and around 19.7% year-on-year growth in constant currency terms during the period. The brokerage said margin expansion is expected in the March 2026 quarter, supported by favourable revenue mix, rupee depreciation during the quarter and operating leverage.
Deal activity during the March 2026 quarter is expected to remain strong, with estimated wins in the range of $550 million to $600 million. The report noted that the company announced multiple large deals during the quarter, including contracts exceeding $100 million.
“We expect robust signings of $550-600 mn. The company announced 2 deals of over$100 mn in the quarter,” Kotak Institutional Equities said.
Kotak Institutional Equities said attention remains on sustainability of growth outperformance over the coming quarters, integration of acquisitions, deal pipeline visibility and exposure to sectors such as airlines and Middle East markets.
Conclusion
Kotak Institutional Equities’ April 2026 sector report presented a measured view of the information technology services sector, with the March 2026 quarter reflecting muted sequential growth alongside support from currency movement. Tata Consultancy Services, Infosys, Tech Mahindra and Coforge featured prominently in the brokerage’s coverage, with expectations shaped by deal momentum, margin trends and evolving demand conditions leading into FY27.
Disclaimer: This article provides factual analysis only and is not, and should not be construed as, an offer, solicitation, or recommendation to buy or sell securities. Investors must conduct their own independent due diligence and seek advice from a SEBI-registered financial advisor.