IT stocks have seen a resurgence, with the Nifty IT Index increasing by almost 5% in the last month.

On November 27, major players such as Infosys, HCL Tech, Wipro, LTIMindtree, and Tech Mahindra experienced gains of up to 1% in a stable market.

Analysts at Bernstein have identified a growth upcycle in the sector, driven by recovering demand and an increase in BFSI and AI-related contracts.

Bernstein predicts strong growth in the IT sector, supported by strong order books and improved operational efficiencies.

They expect FY26 to be a year of normalized growth, building on the momentum from the latter half of FY25.

The firm favors companies with significant BFSI exposure, highlighting Infosys and TCS for their substantial presence in the US market, which accounts for 50-60% of their revenue.

In the mid- and small-cap segment, specialized software firms like Persistent Systems, which generates 80% of its revenue from the US, are expected to benefit greatly from this growth upcycle, with projections indicating high-teens growth for the stock in the medium term.