Bernstein sees the beginning of an upcycle in IT services, driven by recovering growth, a resurgence in BFSI (banking, financial services, and insurance), and scaling AI deals. Growth momentum is expected to strengthen, backed by robust order books and reduced operational leakages.
The brokerage expects FY26 to mark a normalized growth year, building on improvements from H2FY25. Among large-cap IT stocks, Infosys and TCS stand out due to their high U.S. revenue exposure (50-60%), strong BFSI mix (~30%), and margin resilience.
In the mid-cap space, Persistent Systems is Bernstein’s top pick, supported by its 80% U.S. revenue mix and specialization in software. Persistent is poised to grow at high-teens rates in the medium term, benefiting from its niche expertise and strong client relationships.
