Software & Services share price target

We met the management of Mu Sigma, a data analytics and decision sciences company, to understand the AI-led structural changes underway in the industry. The management indicated that the nature of enterprise engagement, scope, and delivery has become more dynamic, which requires quality judgment at scale while embedding AI into the enterprise decision framework. The decision framework is deeply integrated and has built broader institutional dependency' instead of relying upon individual deliveries', aided by decision ontologies and knowledge graphs. Hence, the intensity of multi-faceted domain depth that the company has garnered over decades...

Data Centre (DC) power demand is expected to rise from 0.7% of total demand in FY25 to 1.6% by FY30E, with upside from faster DC additions in India Concentration of data centres in Mumbai MMR and Chennai...

In our AI series, this piece deep dives into the structural opportunity unfolding for the capital goods ecosystem in data center, driven by accelerating investments in digital infrastructure. Data centers are rapidly becoming the backbone of the digital economy, supporting cloud, AI, and real-time data processing. As compute demand scales exponentially, the underlying infrastructure intensity, particularly power and electrical...

Demand conditions remain steady but cautious, with clients taking longer to make decisions. While BFSI and Technology sectors are seeing some recovery in discretionary spending, segments like Manufacturing, Automotive, and Communications continue to stay weak, affecting overall growth. Deal wins remain healthy, but most are focused on cost saving and vendor consolidation rather than new digital projects, which is limiting near-term revenue growth. Concerns around GenAI disruption especially from companies like Anthropic etc are also slowing decision-making as clients assess returns and risks. At the same time, AI presents a strong long-term opportunity, with the AI...

The AI driven build-out of global technology infrastructure is structurally elevating demand for specialty chemicals companies, making them integral across semiconductor fabrication and data center ecosystems. The data center specialty chemicals market is expected to scale from ~$11.8bn in CY25 to ~$27.4bn by CY32 (12.8% CAGR), led by GPU-intensive AI workloads and hyperscale expansion. The segment remains highly attractive given its stringent purity requirements (99.999%+), high chemical intensity (~280kg per kg of silicon), and recurring consumption nature, enabling premium pricing and margins....

4QFY26 is expected to be soft and slightly discouraging in an otherwise progressive quarter, after Q3 seasonality and furloughs overhang. Beyond the continued macro softness in few pockets, the cloud of Geo-political conflicts is affecting enterprise spending decisions for few names within our coverage universe. The Middle East tension is directly or indirectly impacting industries around Travel, Transport, Logistics, Energy, O&G and few adjacent areas. The smaller short-burst deals see execution deferrals and delayed closures, leading to elongated sales cycle and slower revenue conversion. We expect median revenue growth of 1.0% QoQ in CC terms & 1.2% QoQ...

The Nifty IT index has witnessed a sharp correction over the past few months, declining ~25% YTD, primarily driven by rising concerns around the potential impact of Generative AI (Gen AI) on the long-term business model of IT services companies, along with macro and geopolitical uncertainties. Large-cap and midcap IT stocks have corrected meaningfully despite relatively stable operating performance and continued deal wins, as investors reassess near-term growth...

Organic growth raised from 2% to 2.5%, driven by 1HFY26 (August YE) performance. But lower than 4% delivered in FY25

Accenture's (ACN: NYSE) CC revenue growth exceeded street estimates and came near the top end of its guidance. The impact of the US Federal business on revenue growth was relatively higher; excluding the US-Fed business, the Americas segment grew 6% YoY in CC terms (vs. 3% YoY CC reported). The evolving AI landscape is perceived as an enabler, accelerating enterprise integration architecture even faster amid expectations of rising workloads. Management believes small and mid-market clients will increasingly adopt technology as costs decline, thereby expanding the addressable market through new verticals and geographic presence. With improving...

Information Technology Sector: AI-New Growth Wave in Technology Services

India's data center capacity is expected to rise by 4x from 1.5GW in 2025 to 7GW by 2035. This would generate domestic demand for critical minerals, also aided by our...

The Indian IT-service sector is expected to see a seasonally soft quarter, with furloughs and an unchanged macro environment weighing on near-term growth. Client decisionmaking remains cautious, particularly for discretionary spending, resulting in muted sequential performance across most of the tech companies. Deal execution continues to provide support, and mid-tier firms are likely to outperform Tier-1 peers due to better agility and stronger exposure to cost-optimization deals. Market focus is gradually shifting toward medium-term signals, as enterprises scale AI-initiatives from pilots to enterprise-wide deployments. AI-led transformation and infrastructure modernization continue to drive deal pipelines and are increasingly becoming central to client...

The month of December saw mixed chemical price movement: heavy soda ash was up 11% MoM, Toluene was down 11%, and TDI saw a 12% increase. The price growth in Ref gases picked up pace again, as the refrigerant gases index grew by 10% MoM. Contrary to earlier trends, this pick up was on the back of 16% price jump in R32 prices. This is expected to have an effect on the results of our coverage companies, NFIL and SRF, which had previously guided for a...

The Indian IT sector is poised for a gradual recovery in Q3FY26, driven by accelerating AI-led transformations, cloud modernization, and vendor consolidation amid cautious global spending.

Organic growth guidance of FY26 (Aug YE) of 2% is lower than actual 4% in FY25. ACN indicated no material change in demand either way

The US Government on Friday, Sept. 19, 2025, announced fee hike to US$100k for applicants to the H-1B visa program for skilled foreign workers starting with FY26 lottery cycle. The one-time fee applicable on all companies (Indian/US) that use the...

In Q1 FY26, the Indian IT sector delivered a soft performance, with Tier-2 firms like Coforge outperforming large players in both revenue growth and execution. Largecap companies such as TCS, Infosys, and HCLTech were impacted by macroeconomic uncertainty that delayed discretionary spending, leading to muted growth. However, strong deal wins especially at Infosys and HCLTech indicates improvement in demand, prompting both firms to raise the lower end of their FY26 revenue guidance. Tier-2 players meanwhile maintained their strong growth outlooks. GenAI, cloud, and digital transformation remained key drivers of interest but monetization continues to lag as clients focus on pilots rather than scaled adoption. The absence...

hikes the improvement in margins would either be flat or negligible due to missing operating leverage. We expect median revenue growth to decline by 1.2% QoQ in CC terms & grow 0.5% QoQ in USD terms. Currency volatility continues with major currencies like EUR and GBP having strengthened against USD by 5.9% and 7.6% QoQ, respectively, which will translate into tailwinds to the tune of 60-400bps QoQ in reported terms. Vertical wise, BFSI should continue its growth momentum, while hi-tech and ENU should also support growth for selective names. Manufacturing and...

Accenture's (ACN: NYSE) performance in Q3 came above consensus estimates and at top end of the guidance despite the underlying challenges. The growth was driven by managed services, attributed to FS & Americas, a positive read through for Indian IT companies. However, revenue guidance for Q4 (USD 1717.6 bn) implies softness on account of caution among enterprise clients along with Federal mandates to prioritize spending. We believe the degree of intensity is more noticeable in the former than the latter, as the bookings growth on outsourcing decelerated further (down 10% YoY), while Public Service and Americas are growing at Consol business growth. For the Indian...