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Informist, Friday, Mar. 28, 2025

MUMBAI – Information technology stocks are expected to be range-bound in the near term due to mounting fears of a weaker 2025-26 (Apr-Mar) for IT companies as rising macroeconomic uncertainty led by US President Donald Trump's tariff measures and the resultant global trade war, has caused further delay in pick-up of discretionary spending for the IT sector, analysts said. IT stocks would take cues from US reciprocal tariff measures coming into effect on Wednesday.

With the March quarter earnings announcements around the corner, analysts expect investors to focus more on management commentary on discretionary spending trends and outlook for FY26 than the quarterly results. "Quarterly numbers have got no major role to play at this point of time, as market is more worried about the future outlook and not just dependent on one quarter," Sumit Pokharna, vice-president of research at Kotak Securities, said. 

Over the week, Nifty IT rose marginally with six out of 10 contituents seeing an on-week rise. Coforge and Persistent Systems led with an over 4.5% rise each over the week, while L&T Technology Services fell 3.6%.

The Nifty IT is seen gaining support at around 36500–36200 levels in the near term and resistance at around 38000–38350 levels, Vipin Kumar, senior derivatives and technical research analyst at Globe Capital Market said. 

IT stocks rose earlier this month as there was some optimism that the Jan-Mar quarter might not see much pain. However, reports by research firms and broking houses indicating a cautious view on FY26 have impacted market sentiment, Rishubh Vasa, research analyst at Indsec Securities, said. Earlier this week, CRISIL Ratings had said that the Indian IT services sector may sustain its 6-8% revenue growth in FY26, amid continuing macroeconomic headwinds and emerging uncertainties in the key markets of the US and Europe. However, the operating profitability of these companies is expected to remain healthy, led by modest employee additions amid low attrition, CRISIL said. 

While the manufacturing, retail and logistics verticals, which are directly exposed to US trade policies, might re-evaluate their IT spends in the near or medium term, service-oriented or customer-facing industries are expected to continue their IT spends with the growing focus on artificial intelligence, brokerage firm PL Capital said in a report. IT spending is expected to remain soft, though not to the extent experienced in early 2023, as early experiments in AI are progressing well, the report said. Moreover, the brokerage expects the risk of trimming annual contract values to be minimised with cannibalisation of spending from discretionary to cost-focused AI. 

TOP HEADLINES

* Infosys helps LKQ Europe implement human capital management solution
* Zensar Tech to modernise UK-based Tesco Insurance's digital infra
* HCL Tech partners with Samsung to develop semiconductors
* IT svcs FY26 revenue to grow 6-8%; operating profit seen steady, says CRISIL
* Newgen Software's US arm executes $1.39-mln contract with overseas client
* Coforge, Microsoft collaborate for AI-integrated solutions for engg svcs
* Infosys expects tax refund of INR 29.49 bln from income tax department
* Wipro signs 10-yr contract worth $650 million with ReAssure UK Services
* LTIMindtree to modernise UAE-based Arenco Group's IT infrastructure
* Intellect Design, LTIMindtree partner for svcs across Asia, Africa
* PRESS: Wipro GE Healthcare starts $1 bln expansion plan in India
* Wipro's Saudi Arabia arm completes acquisition of remaining 45% stake in JV
* HCL Tech launches agentic AI-powered smart mfg solution on Google Cloud
* PRESS: TCS, Infosys to sell AI services through Adobe's platform
* Wipro announces AI-driven agents to enhance efficiency across healthcare cos
* HCL Tech, US financial co Western Union to set up tech centre in Hyderabad

Following are the resistance and support levels for the stocks for next week as per calculations by Informist based on their prices on the National Stock Exchange:

End

US$1 = INR 85.47

Reported by Arya S. Biju

Edited by Tanima Banerjee

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