Strong deal pipeline, US prospects augur well for large-cap IT; Infy, TCS top picks

Brokerage Bernstein prefers Infosys and TCS among large-cap software exporters with high revenue exposure to the US and 30% revenue from banks and financial services sector.

The firm said that companies with high US exposure could do better. “We see guidance upgrades, strong deal pipeline and a Trump win (tax cuts/strong US GDP) as the start of ‘stronger growth’ cycle for the sector,” said Berstein’s note to clients.

Infosys and TCS are expected to go up 22% and 10%, respectively, and Wipro may fall as much as 20%, according to Bernstein’s analyst price targets.

“We continue to see the beginning of an up-cycle trend as growth recovers, BFSI (banking, financial services and insurance) inflects and AI (artificial intelligence) deals scale up,” said the brokerage. “Growth expectations to be led by the strength of order book and reduction in leakages. We believe FY26 will be a normalised year with continuing from H2FY25.”