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Informist, Friday, Jul. 4, 2025

MUMBAI – Information technology stocks are expected to see a positive momentum next week on expectation of no further deterioration in demand environment and hope of further interest rate-cut in the US. The US tariff measures and broader macroeconomic challenges, though expected to limit discretionary spending, are seen having a lower-than-anticipated impact on the sector, analysts said. However, the improvement in earnings of domestic IT companies is expected to be gradual.   

Next week, the focus will be on the outcome of bilateral trade talks between the US and India, and the upcoming expiration of the 90-day pause of US President Donald Trump's reciprocal tariffs. However, analysts do not expect this to have a major impact on sector. Clients of these companies is seen to have made plans to manage spending on IT even if tariffs hit, said Rishubh Vasa, research analyst covering the sector at Indsec Securities. 
  

Further, the deal pipeline of the companies remains robust, particularly in areas like cost optimisation, infrastructure modernisation, and artificial intelligence initiatives, HDFC Securities said in a report Thursday. Generative AI continues to generate new opportunities, with strong demand driving many projects beyond the concept stage into full-scale deployment. This was also evident in Accenture's solid Gen AI bookings, the brokerage said. 

Analysts expect subdued earnings for the sector in the June quarter. HDFC Securities expects tier-1 IT companies to report muted revenue growth in constant currency terms, while mid-tier companies are expected to report strong growth. IT major TCS is expected to report a marginal decline on quarter in its revenue in constant currency terms for the latest quarter, based on moderation of BSNL revenue and slower ramp-up of deals. The company's margin is also expected to decline on quarter-on-quarter basis. 

Next week, the Nifty IT index is seen finding support at 38,700 levels and resistance at 39,600 levels, said Brijesh Ail, head of technical and derivatives at IDBI Capital said. Over this week, the index ended grew 0.9% while the benchmark Nifty 50 and Sensex fell 0.7%.   

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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

Reported by Arya S. Biju

Edited by Akul Nishant Akhoury

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