Investec Upgrades IT Services Stocks with 10-15% Return Potential, Names Top Picks

Investec, a brokerage firm, has upgraded IT services stocks, expecting a 10-15% return potential over the next year. The firm has a 'Buy' rating on six IT services firms and a 'Hold' rating on two, with a projected 2-27% upside. Investec prefers Tech Mahindra, Infosys, and TCS among the larger stocks and Mphasis, Zensar, and KPIT among the mid-sized ones. The firm believes FY27E will be a year of recovery driven by declining interest rates and normalization of trade-related uncertainties.

Investec, a leading brokerage firm, has recently upgraded its outlook on several IT services stocks, projecting a 10-15% return potential over the next year. The firm has assigned a 'Buy' rating to six IT services firms and a 'Hold' rating to two, with a projected 2-27% upside. Among the larger stocks, Investec prefers Tech Mahindra, Infosys, and TCS, while for mid-sized firms, it favors Mphasis, Zensar, and KPIT.

The firm believes that the fiscal year 2027 (FY27E) will be a year of recovery, driven by declining interest rates and the normalization of trade-related uncertainties. This positive outlook is based on the expectation that these factors will stimulate growth in the IT services sector.

Investec's upgrade reflects the firm's confidence in the sector's resilience and the potential for significant growth in the coming year. The firm's analysis suggests that the IT services sector is poised to benefit from the recovery in global economic conditions and the increasing demand for digital transformation services.

The firm's upgrade is supported by a series of positive developments in the IT services sector, including strong earnings reports from several major players and a positive outlook from industry analysts. The firm's preference for Tech Mahindra, Infosys, and TCS among larger stocks is based on their strong market position, robust financial performance, and potential for growth in key markets.

The firm's preference for Mphasis, Zensar, and KPIT among mid-sized firms is based on their innovative business models, strong customer relationships, and potential for growth in emerging markets. The firm believes that these firms have the potential to deliver significant returns to investors over the next year.

Investec's upgrade is a positive development for investors in the IT services sector. The firm's confidence in the sector's prospects and its preference for a select group of stocks provide a clear signal that investors should consider allocating a portion of their portfolios to this sector.

References:
[1] https://www.marketbeat.com/instant-alerts/filing-3762-shares-in-the-pnc-financial-services-group-inc-pnc-acquired-by-kaufman-rossin-wealth-llc-2025-08-21/
[2] https://www.tradingview.com/news/reuters.com,2025-08-20:newsml_RST0575Wa:0-reg-investec-plc-investec-ltd-intention-to-re-purchase-shares/