Which IT Enabled Services Stocks Are Deep Value Picks in Week of Apr 18, 2026?

Sector Pulse

The IT Enabled Services sector, represented this week by RPSGVENT, presents a mixed fundamental picture characterized by top-line expansion offset by bottom-line pressures. RPSGVENT reported a 15.57% year-on-year increase in consolidated net sales to ₹2,756.40 crore, driven predominantly by its Process Outsourcing segment which contributed over 85% of total revenue. However, the company's ability to translate this revenue into profitability was constrained. RPSGVENT posted a consolidated net loss of ₹136.30 crore, representing a 231.4% sequential widening of losses. This profitability erosion was heavily influenced by exceptional items and surging employee costs, which accounted for 54.3% of net sales.

Catalysts Playing Out Across the Pack

Despite the earnings miss, several catalysts are actively shaping the sector's trajectory. The Order Book Or Contract Wins catalyst is highly active, with RPSGVENT securing 5 large deals, each with an annual contract value exceeding US$5 million. This deal momentum is providing revenue visibility. Additionally, Geographical Expansion is playing a critical role in inorganic growth; RPSGVENT completed the acquisition of UK-based Pastdue Credit Solutions Ltd. for GBP 2.20 crore, expanding its nearshore delivery capabilities. Conversely, Mandatory Industry Norms acted as a negative catalyst this quarter, as the implementation of new labor codes forced RPSGVENT to recognize a ₹103.90 crore exceptional charge, directly impacting the bottom line.

What Managements Are Guiding

Forward guidance provides a stark contrast to the current quarter's profitability challenges. Management tone remains confident, with RPSGVENT raising its FY26 constant currency revenue growth guidance to a range of 14.5% to 15.5%, up from the previous 13% to 15% band. This upward revision is underpinned by 5 large deal wins and an expanding client base across the BFSI and healthcare verticals. Furthermore, management revised its EBIT margin guidance upward to 11.5%–12% (from 11.25%–12%), banking on delivery optimization, right-sourcing, and AI interventions to offset wage inflation. The company also outlined a capital expenditure plan of ₹700 crore to support these initiatives.

Shared Risks (9-type taxonomy)

The sector faces a complex matrix of risks. Regulatory risk is currently the most severe, as evidenced by RPSGVENT's ₹103.90 crore hit from increased gratuity and compensated absence liabilities tied to new Labour Codes. Labor risk remains a persistent medium-severity threat; with employee costs reaching ₹1,497.60 crore and wage hikes implemented for over 90% of the workforce, margin pressure is acute. Management is attempting to mitigate this via an 'UnBPO' playbook focused on technology arbitrage. Litigation risk also surfaced, with a subsidiary receiving a ₹78.28 crore GST demand for product misclassification. On the periphery, geopolitical and cyber risks are emerging, prompting a pivot toward closer cultural and time zone alignment for client delivery.

Bottom Line

The IT Enabled Services sector is navigating a transitional phase where demand and deal wins are clashing with regulatory and labor cost headwinds. While RPSGVENT's current quarter net loss of ₹136.30 crore highlights the immediate financial toll of these risks, the raised revenue and margin guidance suggest management believes these issues are largely transitional. The success of AI interventions and delivery optimization in offsetting structural wage increases will be the critical determinant of whether the sector can achieve its projected 11.5%–12% EBIT margins in FY26.