Infosys, HCL unlikely to revise upper end of FY26 guidance, says HSBC as it picks IT stocks

HSBC on Friday said the recent rupee weakness has provided cushion to pricing pressure, as it prefers Infosys, Tech Mahindra, LTIMindtree, MphasiS and Hexaware among IT sector stocks. The brokerage said the September quarter is unlikely to show any change in growth trajectory for the sector as demand remains soft. This is led by both AI deflation and macro uncertainty, which may not improve until FY27, it said. Advertisement

HSBC said the Q2 results season for Indian IT is unlikely to be much different from Q1 as demand weakness persists.

"Current industry growth is driven by vendor consolidation and cost rationalisation deals, which is a zero sum-game. We have a long-standing assumption that the sustainable growth rate for the sector is unlikely to be more than 4-5 per cent, though ove