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Best IT Stocks in February 2025: Bls International, Persistent Systems & More Based on 5-Yr CAGR Basis

Updated on: Jan 28, 2025, 7:04 PM IST
India's IT sector drives GDP, exports, and innovation, with best stocks like Bls International and Persistent Systems showing strong 5-year CAGR growth.
Best IT Stocks in February 2025: Bls International, Persistent Systems & More Based on 5-Yr CAGR Basis
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India’s Information Technology (IT) sector remains a vital contributor to the economy, significantly boosting GDP and export revenues. Despite challenges from the COVID-19 pandemic, the IT industry displayed remarkable resilience, enabling remote work through robust infrastructure and driving stock market growth. Encompassing IT services, software, R&D, outsourcing, and e-commerce, the IT-BPM sector has also seen a surge in innovative startups in AI, fintech, and data analytics, attracting significant investments.

Supported by initiatives like Digital India, Make in India, and Startup India, the IT sector thrives on skilled manpower, cost advantages, and favourable outsourcing policies. A report forecasts annual revenue growth of 12.98% between 2024 and 2028, reaching $43.09 billion. Despite global competition and rapid technological evolution, the sector is poised for expansion and innovation, solidifying India’s position as a global IT powerhouse. In this article, find the best IT stocks in India for February 2025, based on 5-year CAGR.

Best IT Stocks in India in February 2025 – Based on 5yr CAGR

Name Market Cap (₹ in crore) 5Y CAGR (%) PE Ratio
Bls International Services Ltd 18,048.20 91.23 57.67
Persistent Systems Ltd 98,050.96 77.12 89.67
KPIT Technologies Ltd 35,930.48 67.16 60.43
Newgen Software Technologies Ltd 16,594.83 57.76 65.95
Firstsource Solutions Ltd 25,433.57 53.24 49.41

Note: The best IT stocks list provided here is as of January 28, 2025. The stocks are selected from the Nifty 500 universe and are sorted based on the 5-yr CAGR.

Overview of the 5 Best IT Stocks in India in February 2025

 1. Bls International Services Ltd

BLS International Services Limited (BLS), part of the four-decade-old BLS Group with a global footprint, is a leading player in visa application outsourcing services. BLS International Services posted a consolidated net profit of ₹138.23 crore in Q2 FY25, marking an increase from ₹78.75 crore in Q2 FY24. Revenue from operations grew year-on-year to ₹495.01 crore.

The company’s profit before tax (PBT) stood at ₹163.96 crore, up from ₹87.18 crore in the same quarter last year. EBITDA rose to ₹164 crore in Q2 FY25, compared to ₹86.7 crore in Q2 FY24.

Key Metrics:

  • Return on Equity (ROE): 41.48%
  • Earning per Share (EPS): ₹0.98

    2. Persistent Systems Ltd

Persistent Systems provides software engineering and strategic services to help businesses modernise and adopt digital solutions. Mid-tier IT services firm Persistent Systems posted a net profit of ₹373 crore for the third quarter ended December 31, 2024, marking a year-on-year increase. The growth was driven by the company’s AI-led, platform-driven services strategy, despite Q3 being a seasonally weak period for the IT sector.

Consolidated revenue for the quarter grew year-on-year to ₹3,062.28 crore. The company’s operating margin improved by 90 basis points to 14.9%, following two consecutive quarters of flat margins at 14%.

Key Metrics:

  • ROE: 19.20%
  • EPS: ₹67.47

    3. KPIT Technologies Ltd

KPIT Technologies is a global leader in the automotive and mobility sector, focusing on the development of software-defined vehicles. KPIT Technologies Ltd reported a year-on-year (YoY) increase in profit after tax (PAT) to ₹2,037 million for the second quarter of FY25. Revenue for the quarter stood at $173 million, driven by strong performance in the Passenger Car Vertical and the Asia geography.

The company’s EBITDA margin improved to 20.8%, marking a 5.6% sequential increase. KPIT also secured $207 million in new engagements during the quarter, further strengthening its business outlook.

Key Metrics:

  • ROE: 23.51%
  • EPS: ₹14.71

    4. Newgen Software Technologies Ltd

Newgen Software Technologies, a global leader in software product development, has demonstrated robust financial growth. Newgen Software Technologies reported a year-on-year (YoY) increase in consolidated net profit to ₹89 crore for the December quarter, up from ₹68 crore in the same period last year, according to a regulatory filing.

The Noida-based tech firm recorded revenue from operations of ₹381 crore during the quarter, marking a growth compared to ₹323.6 crore in the year-ago period.

Key Metrics:

  • ROE: 24.24%
  • EPS: ₹20.90

    5. Firstsource Solutions Ltd

Firstsource Solutions, a part of the RP-Sanjiv Goenka Group, is a specialised global business process management partner. The company delivers transformative solutions and services across the customer lifecycle, catering to diverse industries such as Healthcare, Banking and Financial Services, Communications, Media, Technology, and more.

Firstsource Solutions in Q2 FY25 reported strong performance with a year-on-year (YoY) increase in revenue and a 9.25% rise in profit.

Sequentially, the company’s revenue grew by 7.5%, while profit saw a modest 2.19% increase compared to the previous quarter, reflecting solid operational performance despite a competitive market environment.

Key Metrics:

  • ROE: 14.72%
  • EPS: ₹5.30

Best IT Stocks in February 2025 – Based on Market Cap

Name ↓Market Cap (₹ Crore) PE Ratio 5Y Return (%)
Tata Consultancy Services Ltd 14,70,806.85 32.73 85.75
Infosys Ltd 7,54,687.36 29.61 135.95
HCL Technologies Ltd 4,63,984.66 30.95 186.79
Wipro Ltd 3,22,059.39 30.31 159.09
Bharat Electronics Ltd 1,92,210.63 49.56 819.27

Note: The best IT stocks list here is as of January 28, 2025. The stocks are sorted based on the market cap. 

Best IT Stocks in February 2025- Based on Net Profit Margin

Name PE Ratio ↓Net Profit Margin (%) 5Y Return (%)
Oracle Financial Services Software Ltd 38.36 33.05 214.83
CE Info Systems Ltd 67.45 32.08 12.46
Tata Elxsi Ltd 50.10 21.56 544.50
Newgen Software Technologies Ltd 65.95 19.48 802.07
Bharat Electronics Ltd 48.24 19.03 819.27

Note: The best IT stocks list here is as of January 28, 2025. The stocks are sorted based on the net profit margin. 

IT Sector Growth in India

The Indian IT sector is on a rapid growth trajectory, projected to reach $350 billion by 2026, significantly contributing to the GDP. Key drivers include rising demand for IT services, emerging technologies like AI and cloud computing, and increased global outsourcing, with export revenue being a major contributor.

India’s IT growth is fueled by a skilled workforce, cost-effective services, and government initiatives like “Digital India.” Multinational companies are boosting the sector by establishing Global Capability Centers, while innovations in AI, blockchain, and data analytics further strengthen India’s position as a global IT hub.

Key Factors to Consider Before Investing in IT Stocks in India

Investing in India’s thriving Information Technology (IT) sector offers significant potential, but making informed decisions requires a careful analysis of several factors. From company size to economic conditions, here are key aspects to evaluate before buying IT stocks.

  • Company Size and Diversification

When investing in IT stocks, assessing a company’s size and service offerings is crucial. Leading firms often operate across diverse sectors such as banking, finance, insurance, and entertainment. Companies with a broad portfolio of reliable services and robust growth tools are better positioned to weather industry challenges and drive long-term value for investors.

  • Innovation and Technological Advancement

Innovation plays a pivotal role in determining a company’s success in the IT sector. Businesses developing and commercialising groundbreaking technologies often perform well in the market. Investors should focus on companies with patents, cutting-edge solutions, and a strong track record of technological advancements, as these factors can enhance the value of their stocks.

  • Market Competition

The IT industry is highly competitive, with companies vying for market share. Before investing, it is essential to evaluate how a company stacks up against its competitors. Key factors to consider include product differentiation, strategic partnerships, and its ability to adapt to a dynamic market environment.

  • Emerging Industry Trends and Demand

Technological trends such as blockchain, artificial intelligence, and cloud computing are transforming the IT landscape. Companies that align with these trends and respond effectively to evolving customer preferences are better positioned for growth. Staying updated on industry innovations can provide valuable insights for stock selection.

  • Economic Factors and Market Conditions

Macroeconomic factors, including GDP growth, interest rates, and consumer spending, heavily influence IT stocks. While IT companies may face challenges during economic downturns, periods of growth often present lucrative opportunities. Investors should consider the broader economic climate to gauge the sector’s performance potential.

Conclusion 

India’s IT sector stands as a pillar of economic growth, driven by innovation, global outsourcing, and government initiatives. With robust projections, skilled talent, and adaptability to emerging technologies, the industry offers immense investment potential. Careful evaluation of market trends, competition, and economic factors can help investors capitalise on this thriving sector.

 

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.

Published on: Jan 28, 2025, 7:04 PM IST

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