Vertical Winners vs. Laggards – Q2 2025
Nagarro’s Q2‑2025 earnings call highlighted a clear split across its industry mix. The high‑tech, telecom & media and automotive & mobility segments delivered the strongest top‑line momentum, posting double‑digit year‑over‑year revenue growth (≈12‑15 %). This outperformance was driven by accelerated digital‑engineering spend on 5G rollout, AI‑enabled product development, and a surge in EV‑platform projects, all of which benefited from resilient capex budgets despite the broader macro slowdown. Conversely, the financial services (BFSI) and industrial/manufacturing verticals lagged, with flat‑to‑slight negative growth (‑1 % to ‑3 %). Weakness in BFSI reflected tighter credit conditions and delayed digital‑transformation initiatives, while the manufacturing side suffered from lingering supply‑chain constraints and reduced discretionary spending.
Trading Implications
From a fundamental standpoint, the clear tailwind in high‑tech and automotive should keep Nagarro’s forward‑revenue guidance bullish, supporting a buy‑on‑dip stance for the stock if it retraces below the 50‑day moving average (≈€38). The lagging BFSI and industrial exposure, however, adds concentration risk; a widening margin gap could pressure near‑term earnings if macro pressures intensify. Technically, the stock is holding above its 200‑day SMA and has formed a higher‑low/higher‑high pattern, indicating upward bias, but the RSI (≈55) suggests there is still upside potential without being overbought. Investors could consider a partial long position with a stop‑loss just under the 200‑day level (≈€35) and look to add on any pull‑back that coincides with a reaffirmed quarterly outlook from the management on the high‑growth verticals.