Kotak Securities Picks 5 Top IT Stocks to Buy Now Amidst Sector Pressures

• India's IT sector faces muted Q4FY26 performance due to global uncertainties and GenAI disruptions, but currency tailwinds may boost year-on-year earnings.
• Rupee depreciation (6.5% YoY) is expected to support EBIT margins for IT firms, making valuations attractive after recent corrections.
• Kotak Securities highlights TCS, Infosys, HCL Technologies, Tech Mahindra, and Coforge as top picks based on valuation, growth potential, and deal momentum.
• TCS is expected to lead growth among large-caps, Infosys to benefit from tech spending recovery, and HCL Tech from its diversified portfolio.
• Tech Mahindra is seen as a turnaround story with improving execution, while Coforge offers growth and reasonable valuation among mid-caps.

Key Questions Answered

Which IT stocks offer the best long-term growth potential?

ICICI Direct suggests staggered investments in select IT stocks for strong returns over the next 18-24 months.

How will GenAI impact IT sector profitability next year?

GenAI is expected to cause "deflationary growth" in the IT sector next year by improving productivity but reducing billing and pricing power.

What are the biggest risks for IT investors now?

The biggest risks for IT investors now include muted growth, the deflationary impact of Generative AI on pricing, geopolitical tensions, and potential disruptions from cyberattacks on data centers {{1