Whalesbook
### Nuvama's Tech Sector Conviction
The Indian midcap Information Technology sector is demonstrating resilience, with Nuvama Institutional Equities solidifying its optimistic stance on Persistent Systems, Coforge, and Mphasis. Following the release of Q3FY26 financial results, Nuvama has reiterated 'Buy' recommendations for all three companies. This sustained positive view is predicated on robust execution evidenced by better-than-expected revenue growth, stable operating margins, and significant deal wins. The brokerage highlighted that order intake and pipelines provide clear visibility for upcoming quarters, reinforcing its confidence in the firms' continued performance trajectory. [cite: News1]
### Persistent Systems: AI-Driven Momentum
Nuvama Institutional Equities has maintained a 'Buy' rating on Persistent Systems, setting a 12-month target price of Rs 7,700, suggesting a potential upside of approximately 27.4% from recent trading levels. The company reported a strong Q3FY26, with revenue increasing by 4.1% quarter-on-quarter in constant currency to $422.5 million, surpassing Nuvama's estimate of 3.4% growth. [cite: News1] Adjusted EBIT margins expanded sequentially to 16.7%, even with wage hikes, exceeding expectations. This improvement was attributed to platform-led sales and efficiencies derived from Artificial Intelligence (AI) initiatives. [cite: News1] Total contract value (TCV) for the quarter rose 14% year-on-year to $674.5 million, driven by broad-based growth across BFSI, healthcare, and hi-tech verticals. Monetization of AI platforms like SASVA and IAURA is contributing to performance and is expected to scale. [cite: News1] Persistent Systems' market capitalization stood at approximately ₹95,311 crore as of January 28, 2026, with a trailing twelve-month P/E ratio around 55.28. The stock was trading around ₹6,190 on January 30, 2026.
### Coforge: Order Book Strength Fuels Growth
Coforge retains its 'Buy' rating from Nuvama Institutional Equities, with an elevated 12-month target price of Rs 2,500, implying a substantial 49.9% potential upside. The company delivered strong Q3FY26 results, with revenue growing 4.4% quarter-on-quarter in constant currency to $478 million, ahead of Nuvama's projection. [cite: News1] The 12-month executable order book saw a significant 30.4% year-on-year increase to $1.7 billion, bolstered by six large deal wins across BFS, travel, insurance, and healthcare sectors. [cite: News1] Emerging verticals spearheaded growth, complemented by sequential improvements in healthcare, hi-tech, travel, and insurance. Coforge's operational efficiencies and revenue diversification are noted strengths, alongside healthy free cash flow generation. [cite: News1] As of January 28, 2026, Coforge's market capitalization was approximately ₹56,314 crore, with a P/E ratio near 40.64. The stock traded around ₹1,678.10 on January 29, 2026.
### Mphasis: Deal Wins Outpace Revenue Growth
Nuvama Institutional Equities maintained a 'Buy' rating on Mphasis with a target price of Rs 3,400, indicating an approximate 24.2% upside from current trading levels. The company presented a stable Q3FY26 performance, with revenue growing 1.5% quarter-on-quarter in constant currency to $451.4 million, slightly above expectations. [cite: News1] EBIT margins remained steady at 15.2%. [cite: News1] While Mphasis secured strong deal wins, totaling $428 million in the quarter and doubling trailing twelve-month deal wins year-on-year to $2.1 billion, revenue growth is noted to be lagging this deal activity. Faster conversion of this robust pipeline is deemed necessary to enhance near-term growth visibility. [cite: News1] A significant portion of new deals are AI-led, with management reporting stable pricing. [cite: News1] As of January 28, 2026, Mphasis had a market capitalization of approximately ₹52,339 crore and a P/E ratio around 29.35. The stock was trading near ₹2,740.60 on January 29, 2026.
### Sectoral Tailwinds and Valuations
The Indian IT midcap segment continues to show relative strength, outperforming larger peers in growth pace during Q3FY26, according to industry analysis. Despite seasonal headwinds and some margin pressures from wage hikes, the sector benefits from a strong demand for digital transformation and AI-driven solutions. While Persistent Systems exhibits a higher P/E ratio of around 55.28, Coforge trades at approximately 40.64 and Mphasis at 29.35, reflecting varied growth expectations and market positions within the midcap IT space. Analysts suggest that the IT sector's overall performance may be bottoming out, with a focus shifting towards AI spending and future client budgets for CY26.