{
  "id": 10865398,
  "title": "IT stocks rally: Coforge, Mphasis, TCS, Persistent Systems gain up to 5%, Kotak sees muted Q2 growth",
  "url": "https://urgent.news/2026/09/30/it-stocks-rally-coforge-mphasis-tcs-persistent-systems-gain-up-to-5",
  "topic": "finance",
  "section": "Finance & Markets",
  "published": "2026-09-30T05:07:32.000Z",
  "source": {
    "name": "Hindu BusinessLine",
    "slug": "hindu-businessline",
    "url": "https://www.thehindubusinessline.com/markets/it-stocks-rally-coforge-mphasis-tcs-persistent-systems-gain-up-to-5-kotak-sees-muted-q2-growth/article71526782.ece"
  },
  "original_language": "en",
  "account": "Indian IT stocks experienced a rally on Wednesday, with the Nifty IT index surging more than 2 percent in the early trading session to 28,235.10. All major companies within the sector were trading in the green at the time of reporting, with Coforge, Mphasis, LTM, Oracle Financial Services Software (OFSS), Persistent Systems and TCS leading the charge, surging up to 5 percent each. The positive momentum is anticipated to continue as the Q2 FY27 earnings season approaches, according to Kotak Institutional Equities. The brokerage anticipates subdued growth among large IT firms, while mid-tier companies are poised for outperformance. In their analysis, Kotak factors in the impact of AI-led deflation and a weaker macroeconomic environment, which are expected to restrain growth. HCLTech is projected to spearhead growth among large IT companies, followed by Infosys and TCS, while hybrid firms like Tech Mahindra and LTM are expected to post q-o-q growth rates of 1.6 percent and 1 percent respectively. Mid-tier companies are anticipated to outpace their larger counterparts, with Persistent Systems leading the pack, followed by Coforge and Mphasis. The brokerage expects operating margins to remain stable for large IT firms, although they foresee a marginal decline or stability on a year-over-year basis. Rupee depreciation has counterbalanced pricing pressures and bolstered margins. However, Kotak highlights pricing pressure and high competitive intensity as the chief risks for the IT sector, with meaningful forex losses projected for Tech Mahindra, LTM, Coforge and Hexaware. The brokerage's primary concern lies in the potential negative effects of AI-led revenue opportunities, which they believe are insufficient to offset deflation in existing business. Gross deflation is projected at around 7 percent, while net deflation stands at 3.5 percent. Despite these challenges, Kotak remains bullish on Tech Mahindra, Coforge, Indegene and Sagility, citing their impressive share gains, strong execution, and robust deal conversion rates.",
  "summary": "Kotak expects margins to remain stable, although underlying pressure is becoming increasingly visible in operating metrics",
  "key_points": [
    "Nifty IT index surges 2%, reaching 28,235.10",
    "Coforge, Mphasis, TCS, Persistent Systems gain up to 5%",
    "Kotak predicts muted Q2 growth amid AI-led deflation"
  ],
  "editors_take": "The rally in Indian IT stocks, led by Coforge, Mphasis, and TCS, suggests investors are betting on selective outperformance by mid-tier companies and steady margins for large firms despite anticipated muted growth.",
  "illustration": null,
  "coverage": {
    "outlets": 1,
    "also_reported_by": []
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}