Infosys, Coforge, Persistent, TCS, LTIM shares: CLSA sees up to 113% upside, says this
IT stocks: CLSA suggested a target of Rs 8,058 on Persistent Systems, Rs 2,278 on Coforge, Rs 1,653 on Infosys, Rs 1,698 on TechM and Rs 3,333 on TCS.
- Mar 18, 2026,
- Updated Mar 18, 2026 2:10 PM IST
CLSA on Wednesday said it has high conviction 'outperform' rating on Persistent Systems Ltd and Coforge Ltd and 'outperform' view on Infosys Ltd, Tech Mahindra Ltd (TechM), Tata Consultancy Services (TCS) and LTIMindtree (LTIM). It retained 'Hold' on HCL Technologies Ltd and Wipro Ltd. The foreign brokerage said it met representatives from TCS, Infosys, HCLTech and Wipro, who suggested no evidence of increased deflation in renewal contracts due to the latest AI tools from Anthropic and OpenAI.
"Vertical-wise demand commentary remains intact with BFSI continuing to see tailwinds for all four companies, tech is doing well for HCL and TCS and the retail, auto and healthcare verticals remain soft. A few companies flagged a slight delay in decision making by clients due to the launch of the latest AI tools to explore their true potential and due to the ensuing West Asia crises," it said.
On the West Asia crises, direct revenue exposure for all four companies -- TCS, Infosys, HCL Tech and Wipro, is in low single digits but the broader macro impact will depend on the duration of the crises and impact on inflation, interest rates, GDP growth and broader IT services spending, it said.
Deal pipelines remain strong and valuations for India’s IT sector at its 10-year average now look highly attractive, CLSA said.
CLSA suggested a target of Rs 8,058 on Persistent Systems, Rs 2,278 on Coforge, Rs 1,653 on Infosys, Rs 1,698 on TechM, Rs 3,333 on TCS, Rs 6,304 on LTIMindtree, Rs 1,506 on HCL Tech and Rs 218 on Wipro, hinting at up to 113 per cent potential upside over Tuesday's levels.
The brokerage noted that a few companies flagged slight delays in client decision-making following the launch of new AI tools, as clients evaluated their potential, alongside the ongoing Middle East crisis. CLSA said direct revenue exposure to the region remained in low single digits for all four companies, but added that the broader macro impact would depend on the duration of the crisis and its effect on inflation, interest rates, GDP growth and IT spending. It added that deal pipelines remained strong and valuations for India’s IT sector, at their 10-year average, appeared attractive.
On AI, CLSA said deflation trends remained similar to last year, with strong volume opportunities. It noted that TCS viewed AI as a net tailwind and was in advanced discussions with Anthropic for a potential partnership similar to its engagement with OpenAI.
Infosys’ stance on AI remained unchanged since its February 2026 investor day. HCLTech, meanwhile, continued to see 2-3 per cent annual gross deflation due to AI, which it expected to be offset by volume opportunities across areas such as custom chip design, physical AI, robotics, IP revenue and marketing services, CLSA said.
On the West Asia situation is not yet overblown and has limited direct revenue impact. TCS maintained that its exposure to the region was in low single digits and said the macro environment remained better than last year’s tariff-led uncertainty. Infosys indicated no change in demand conditions from its January 2026 earnings guidance, with BFSI and energy and utilities expected to improve in FY27 on better discretionary demand and deal wins. HCL Tech said it would reassess the macro environment based on evolving developments in the region.
Referring to past oil spikes, CLSA said IT services demand had remained resilient. It noted that during periods of elevated oil prices in 2010-2014 and 2022, when Brent crude stayed above $100 per barrel, inflation and interest rates rose but US GDP and IT spending growth tracked long-term trends.
It added that defensive sectors such as telecom and utilities typically outperformed, while financials and consumer lagged in earnings growth during such phases. CLSA said valuations for Indian IT companies appeared attractive based on 10-year averages, free cash flow yields and the discount of the Nifty IT index to the broader market.
CLSA on Wednesday said it has high conviction 'outperform' rating on Persistent Systems Ltd and Coforge Ltd and 'outperform' view on Infosys Ltd, Tech Mahindra Ltd (TechM), Tata Consultancy Services (TCS) and LTIMindtree (LTIM). It retained 'Hold' on HCL Technologies Ltd and Wipro Ltd. The foreign brokerage said it met representatives from TCS, Infosys, HCLTech and Wipro, who suggested no evidence of increased deflation in renewal contracts due to the latest AI tools from Anthropic and OpenAI.
"Vertical-wise demand commentary remains intact with BFSI continuing to see tailwinds for all four companies, tech is doing well for HCL and TCS and the retail, auto and healthcare verticals remain soft. A few companies flagged a slight delay in decision making by clients due to the launch of the latest AI tools to explore their true potential and due to the ensuing West Asia crises," it said.
On the West Asia crises, direct revenue exposure for all four companies -- TCS, Infosys, HCL Tech and Wipro, is in low single digits but the broader macro impact will depend on the duration of the crises and impact on inflation, interest rates, GDP growth and broader IT services spending, it said.
Deal pipelines remain strong and valuations for India’s IT sector at its 10-year average now look highly attractive, CLSA said.
CLSA suggested a target of Rs 8,058 on Persistent Systems, Rs 2,278 on Coforge, Rs 1,653 on Infosys, Rs 1,698 on TechM, Rs 3,333 on TCS, Rs 6,304 on LTIMindtree, Rs 1,506 on HCL Tech and Rs 218 on Wipro, hinting at up to 113 per cent potential upside over Tuesday's levels.
The brokerage noted that a few companies flagged slight delays in client decision-making following the launch of new AI tools, as clients evaluated their potential, alongside the ongoing Middle East crisis. CLSA said direct revenue exposure to the region remained in low single digits for all four companies, but added that the broader macro impact would depend on the duration of the crisis and its effect on inflation, interest rates, GDP growth and IT spending. It added that deal pipelines remained strong and valuations for India’s IT sector, at their 10-year average, appeared attractive.
On AI, CLSA said deflation trends remained similar to last year, with strong volume opportunities. It noted that TCS viewed AI as a net tailwind and was in advanced discussions with Anthropic for a potential partnership similar to its engagement with OpenAI.
Infosys’ stance on AI remained unchanged since its February 2026 investor day. HCLTech, meanwhile, continued to see 2-3 per cent annual gross deflation due to AI, which it expected to be offset by volume opportunities across areas such as custom chip design, physical AI, robotics, IP revenue and marketing services, CLSA said.
On the West Asia situation is not yet overblown and has limited direct revenue impact. TCS maintained that its exposure to the region was in low single digits and said the macro environment remained better than last year’s tariff-led uncertainty. Infosys indicated no change in demand conditions from its January 2026 earnings guidance, with BFSI and energy and utilities expected to improve in FY27 on better discretionary demand and deal wins. HCL Tech said it would reassess the macro environment based on evolving developments in the region.
Referring to past oil spikes, CLSA said IT services demand had remained resilient. It noted that during periods of elevated oil prices in 2010-2014 and 2022, when Brent crude stayed above $100 per barrel, inflation and interest rates rose but US GDP and IT spending growth tracked long-term trends.
It added that defensive sectors such as telecom and utilities typically outperformed, while financials and consumer lagged in earnings growth during such phases. CLSA said valuations for Indian IT companies appeared attractive based on 10-year averages, free cash flow yields and the discount of the Nifty IT index to the broader market.