Coforge, Persistent, Tech Mahindra, TCS shares: Choice picks top IT stocks; check targets
On deal activity, Choice said, "Deal momentum remained healthy, with strong bookings contrasting with subdued revenue conversion. Tier-I continued to secure large transformation deals, led by TCS."
- Aug 14, 2026,
- Updated Aug 14, 2026 4:02 PM IST
Indian IT stocks have seen a sharp recovery after the first quarter of FY27, with the Nifty IT Index rising around 20 per cent from its July 2026 lows, although it remains negative on a year-to-date (YTD) basis, according to Choice Institutional Equities.
Choice said the recovery has been supported by improving sentiment, healthy deal pipelines and better demand commentary for the second half of FY27. However, it noted that the risk-reward profile has now moved into a more balanced zone, making further gains increasingly dependent on execution and earnings delivery.
The brokerage said AI monetisation remains a key structural debate for the sector. While early adoption could create near-term deflationary pressure on effort-based revenues, meaningful AI-led scale-up could take time to emerge.
Within the Tier-I IT segment, Choice favours Tata Consultancy Services Ltd (TCS) and Tech Mahindra Ltd, citing stronger margin resilience and deal conversion. In the mid-cap space, it prefers Coforge Ltd and Persistent Systems Ltd, given their growth visibility, deal momentum and execution.
Choice expects the IT sector's re-rating to become increasingly stock-specific and execution-led rather than broad-based.
TCS, Tech Mahindra: Choice's view
Choice has a 'Reduce' rating on TCS, with a target price of Rs 2,320.
For Tech Mahindra, the brokerage has an 'Add' rating and a target price of Rs 1,780. It said, "We have raised our Tech Mahindra target price to Rs 1,780, based on a 20x FY28E EPS multiple (Rs 1,600 earlier)."
Coforge, Persistent Systems: Choice's preferred mid-cap picks
Choice has a 'Buy' rating on Coforge, with a target price of Rs 2,050.
The brokerage has also assigned a 'Buy' rating to Persistent Systems, with a target price of Rs 6,350.
On deal activity, Choice said, "Deal momentum remained healthy, with strong bookings contrasting with subdued revenue conversion. Tier-I continued to secure large transformation deals, led by TCS."
The brokerage added, "Tier-II remained stronger, led by Persistent's record $1.15 billion TCV (Total Contract Value) and Coforge's robust executable order book."
Indian IT stocks have seen a sharp recovery after the first quarter of FY27, with the Nifty IT Index rising around 20 per cent from its July 2026 lows, although it remains negative on a year-to-date (YTD) basis, according to Choice Institutional Equities.
Choice said the recovery has been supported by improving sentiment, healthy deal pipelines and better demand commentary for the second half of FY27. However, it noted that the risk-reward profile has now moved into a more balanced zone, making further gains increasingly dependent on execution and earnings delivery.
The brokerage said AI monetisation remains a key structural debate for the sector. While early adoption could create near-term deflationary pressure on effort-based revenues, meaningful AI-led scale-up could take time to emerge.
Within the Tier-I IT segment, Choice favours Tata Consultancy Services Ltd (TCS) and Tech Mahindra Ltd, citing stronger margin resilience and deal conversion. In the mid-cap space, it prefers Coforge Ltd and Persistent Systems Ltd, given their growth visibility, deal momentum and execution.
Choice expects the IT sector's re-rating to become increasingly stock-specific and execution-led rather than broad-based.
TCS, Tech Mahindra: Choice's view
Choice has a 'Reduce' rating on TCS, with a target price of Rs 2,320.
For Tech Mahindra, the brokerage has an 'Add' rating and a target price of Rs 1,780. It said, "We have raised our Tech Mahindra target price to Rs 1,780, based on a 20x FY28E EPS multiple (Rs 1,600 earlier)."
Coforge, Persistent Systems: Choice's preferred mid-cap picks
Choice has a 'Buy' rating on Coforge, with a target price of Rs 2,050.
The brokerage has also assigned a 'Buy' rating to Persistent Systems, with a target price of Rs 6,350.
On deal activity, Choice said, "Deal momentum remained healthy, with strong bookings contrasting with subdued revenue conversion. Tier-I continued to secure large transformation deals, led by TCS."
The brokerage added, "Tier-II remained stronger, led by Persistent's record $1.15 billion TCV (Total Contract Value) and Coforge's robust executable order book."