Investors often look at their portfolios during Diwali and seek new options. IT stocks could prove popular during Muhurat trading due to AI opportunities, increasing client spend, and a potential bounce back in tech budgets. However, the sector will depend on how well companies can turn new deals into revenue and maintain margins. Overall, it is essential to look at how well software and IT services can turn demand into profitable growth.

While large deals, AI partnerships, and strong order books can be a good indicator, they may not translate into increased earnings. Companies with strong client relationships, high utilisation, and cost discipline may prove better at navigating an uneven bounce back.

Key Drivers for IT Stocks in Samvat 2083

The Indian IT Services sector will have a few key factors to monitor in Samvat 2083. With AI becoming more common, opportunities are emerging for application development, cloud migration, data, and automation. However, clients will still be cautious with their tech budgets, so it is key for IT companies to show tangible benefits.

Key factors to look out for:

• AI Revenue: Are clients paying for AI?

• Discretionary spend: Are companies approving new tech projects?

• Margins: Can companies invest in new areas without increasing costs too much?

Additionally, look at whether companies are seeing growth from new business as opposed to cost discipline or currency.

TCS: Watch AI Revenue and Deal Conversion

Tata Consultancy Services is a good stock to look at as it will have opportunities to turn enterprise AI demand into ongoing revenue. With strong client relationships across banking, retail, manufacturing, and other sectors, it will have opportunities to sell AI implementation alongside its IT services.

However, in the September 2026 quarter, Tata Consultancy reported annualised AI revenue of >$3.1 billion. However, its total contract value (TCV) for the quarter was $9.6 billion, a decrease of 4% year-on-year. This shows that while AI can be an important growth driver, it is important to see how quickly new deals are being won and whether contracts are being turned into revenue.

For Samvat 2083, look at whether Tata Consultancy can continue to grow AI revenue, increase revenue momentum, and maintain margins. However, if the company is trading at a high valuation, a strong business may not lead to strong stock returns.

Infosys: Large Deals and AI Monetisation

Infosys is another stock to look at to see how well it can win large deals and monetise AI. The company will need to be able to win large deals, grow client relationships, and deliver at attractive margins. Infosys reported large deal total contract value of $5.2 billion in the September 2026 quarter, 62% of which were net new. AI revenue grew 29% sequentially and made up 10.5% of total revenue.

However, they did reduce FY27 constant currency revenue guidance to 1%-2% from 1.5%-3%. They maintained operating margin guidance of 20%-22%. Despite the strong deal wins and AI revenue, this does not necessarily lead to increased growth. Look at whether they are converting deals and what proportion of their deals are new business. Also, look at demand from key markets and whether they are maintaining margins.

HCLTech: Advanced AI and Operating Efficiency

HCLTech is a good stock to look at as it has a good balance of IT services, engineering, and advanced AI. This means they can participate in multiple areas of enterprise technology spending. The company reported record new deal bookings of $3.3 billion in the September 2026 quarter, up 27% year on year. Its annualised advanced AI revenue reached $876 million and increased EBIT margin to 18.2%.

Look at whether they can continue this momentum. Investors should look at how quickly new deals are being converted into revenue and whether margins are improving due to increased productivity and utilisation. The company’s engineering and research services, IT and business services, and AI deals can show how diverse their growth is. While they had a good quarter, it would be more useful to look at whether they are showing consistent performance across multiple quarters.

Wipro: A Turnaround Worth Monitoring

Wipro may be a stock of interest to look at to see whether they are seeing an operational bounce back. However, it is important to see whether they are seeing increased profitability or increased demand.

In the September 2026 quarter, Wipro’s IT Services revenue grew very little sequentially in constant currency. Large deal bookings fell 58.6% quarter-on-quarter to $674 million. However, operating margin increased to 16.5% (an increase of 0.5%).

While this shows an improvement in margins, the lack of bookings may be concerning. If new business continues to be weak, it may not be enough to turn around the business. Look at whether they have a strong large deal pipeline, revenue growth sequentially, client spend, and progress on AI services. If they are showing consistent improvements in bookings and revenue, it will give a better indication of an operational bounce back.

Tech Mahindra: Recovery in Communications and Enterprise IT

Tech Mahindra is another IT Services stock to look at. It will be interesting to see whether they are seeing a bounce back in communications, enterprise technology, and digital transformation spend. The company reported revenue of ₹16,180 crores in the September 2026 quarter, an increase of 7.2% year-on-year in constant currency. New deal wins increased by 25.4% year-on-year to $1.02 billion.

Look at whether increased deal wins are leading to sustainable revenue growth and improved profitability. Look at demand from telecom clients, how quickly they are delivering on their enterprise transformation projects, and whether they are keeping costs under control. If they can see an increase in client spend, this can help their business. However, if they continue to see weak discretionary projects, this can limit upside. Look for consistent performance.

Risks to Consider Before Investing in IT Stocks during Diwali

The IT sector still carries some risk with uncertainty in the global economy, cautious client spend, and the pricing of technology services. While there are opportunities from AI, it can also reduce the amount of work needed for certain coding, testing, and support activities. This can cause pressure on traditional billing models. However, there is increased demand for more specialised services.

Valuations can also be a concern. Look at whether companies are on a high P/E ratio compared to their earnings growth, cash flow, and historical valuation. There is little room for disappointment. Not all IT companies are the same. Look at how exposed they are to different sectors such as banking, telecom, manufacturing, and their AI capabilities. Also, look at their deal pipeline and margin profile.

Bottom Line

Tata Consultancy Services, Infosys, HCLTech, Wipro, and Tech Mahindra will give you different ways to look at opportunities in India’s software and IT Services sector. The stocks to consider are those that can convert deals, have a meaningful AI business, and maintain healthy margins. During Muhurat trading, treat these stocks as a watchlist. Look at their quarterly performance, comments from management, valuations, and risks.

Researching it services stocks this Diwali? Visit HDFC SKY MoneyFest for expert stock recommendations, then assess company fundamentals, valuations and risks before investing.