IT Sector Analysis - Deal momentum strengthens growth outlook | Q2FY26
We expect deal wins to be the key growth driver for IT players under our coverage. R Systems and Saksoft are likely to benefit from recent deal momentum and currency tailwinds. Aurionpro should maintain its strong trajectory, led by wins in banking and the TIG segment. Netweb is expected to sustain Q1 strength, supported by 50%+ growth in AI systems. Rashi should benefit from robust seasonal demand in the PES segment. AI and cloud-focused companies are beginning to see tangible use cases, with a more material impact expected over the next 12–18 months. Margins are likely to remain flattish to slightly lower QoQ. We anticipate demand improvement in H2FY26, particularly for players with higher India exposure such as Netweb, Aurionpro, and Rashi.
Companies under our coverage from IT sector:
Netweb Technologies:
Netweb should post another robust quarter following its record Q1, supported by sustained enterprise demand. AI Mission wins are slated for execution from Q3, positioning the company for a strong H2. Margins should stay at the higher end of the 14–15% range, driven by higher contribution from AI Systems (20%+).
Aurionpro Solutions
Aurionpro reported record deal wins in Q2 across banking and TIG. Key highlights include - Rs2.5bn Mumbai Metro deal, transaction banking win in Sri Lanka, Arya. Ai’s first deal win in UK, and a PSU bank digital transformation mandate. The company is expected to sustain its 25%+ growth trajectory, with margins at the lower end of the 20–21% range. Order book should rise to Rs 15.5–16 Bn on the back of these wins.
R Systems
R Systems is expected to post another strong quarter, supported by sustained deal wins across the US and APAC. While tariff-related concerns continue to weigh on discretionary demand, management commentary will be key to gauging CY26 growth. Q2 deal wins have aided Q3 momentum, and margins should remain stable in what is typically the company’s strongest quarter.
Rashi Peripherals
Rashi is expected to sustain mid-teens YoY growth, supported by strong demand for PCs, desktops, and peripherals in a seasonally strong quarter. Margins are likely to remain in the 2.5–2.8% range. Seasonal strength in the PES and LIT segments has continued through Q2, and a PC refresh cycle in H2FY26 should further boost demand.
Saksoft
Saksoft is expected to sustain its growth trajectory, supported by improved mining efforts and favorable currency movements, with a strong GBP and USD likely to bolster margins. However, we anticipate a QoQ dip in margins due to planned wage hikes in Q2..
Valuation & Risks
We expect R Systems, Rashi and Aurionpro to deliver a strong quarter, while Netweb and Saksoft continue its momentum. Our pecking order will be Aurionpro Solutions (Attractive valuation), R Systems (strong growth), Rashi Peripherals (strong quarter), Saksoft (inexpensive valuations) and Netweb (stock has doubled in less than 3-months limiting near-term upside).
Sector Analysis by
- Vinay Menon - Research Analyst
- Miloni Mehta - Research Associate
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