IT stocks to buy: Coforge, Persistent, KPIT Tech, Happiest Minds among Choice's top picks
IT stocks have remained in focus after FPIs sold Rs 17,000 crore worth of shares in February amid concerns that rapid advances in Gen AI could disrupt traditional IT services.
- Mar 6, 2026,
- Updated Mar 6, 2026 9:23 AM IST
IT stocks have remained in focus after foreign portfolio investors (FPIs) sold nearly Rs 17,000 crore worth of shares in February amid concerns that rapid advances in generative AI could disrupt traditional IT services. However, analysts remain positive on IT stock in the long-term, despite short-term volatility.
Choice Institutional Equities engaged with IT professionals from top players to understand the industry perspective on AI’s potential impact. Building on industry perspective, it believes that AI is reshaping the IT services landscape. However, enterprise complexity, governance requirements and integration challenges are expected to moderate the pace of disruption.
IT stocks are undergoing a significant transition driven by increased adoption of artificial intelligence, said Choice. It noted that proactive Gen AI implementation is underway, pricing deflation in ongoing engagements is expected to be limited to around 2-3 per cent due to complex enterprise environments and legacy system integration challenges, which act as buffers against sharper price cuts.
Nuvama Institutional Equities also remain positive in the IT services sector in the medium to long-term, despite some short-term jitters as Gen AI disruption plays out to previous tech cycles for IT services players. Large players are likely to depend on IT services companies for Gen AI deployment, integration and scaling.
Choice pointed out that large enterprises are structurally slower in adopting AI, as mission-critical systems often involve multi-decade architectures and strict compliance requirements. This makes system integrators vital for implementation and governance. Firms certified at Capability Maturity Model Integration (CMMI) Level-5 may encounter productivity pressures, it noted.
Heavy selling in IT names was triggered by concerns that rapid progress in generative AI could curb demand for large-scale, human-driven coding and IT support services—core revenue sources for India’s software exporters. However, FIIs remained net buyers overall, purchasing about Rs 15,250 crore in Indian equities.
Sectors such as aerospace, defence, BFSI, healthcare, and government IT contracts are particularly impacted by these changes. Choice cited data security as another key constraint, with many global enterprises hesitant to share sensitive information due to privacy and regulatory concerns.
IT players are currently testing Gen AI via PoCs with gradual integration into outsourcing contracts and request for proposals (RFPs). AI led services are expected to command higher billing rates and Gen AI is likely to expand long-term industry technology acceptance model (TAM) despite concerns, Nuvama said.
The brokerage states that human oversight in critical processes remains essential to ensure compliance and accountability, even as AI introduces non-linearity in workforce structures. Overall, the sector is entering a structural transition and see midcaps better positioned. It has picked Coforge Ltd, Persistent Systems Ltd, Happiest Minds and KPIT Technologies as its top picks.
IT stocks have remained in focus after foreign portfolio investors (FPIs) sold nearly Rs 17,000 crore worth of shares in February amid concerns that rapid advances in generative AI could disrupt traditional IT services. However, analysts remain positive on IT stock in the long-term, despite short-term volatility.
Choice Institutional Equities engaged with IT professionals from top players to understand the industry perspective on AI’s potential impact. Building on industry perspective, it believes that AI is reshaping the IT services landscape. However, enterprise complexity, governance requirements and integration challenges are expected to moderate the pace of disruption.
IT stocks are undergoing a significant transition driven by increased adoption of artificial intelligence, said Choice. It noted that proactive Gen AI implementation is underway, pricing deflation in ongoing engagements is expected to be limited to around 2-3 per cent due to complex enterprise environments and legacy system integration challenges, which act as buffers against sharper price cuts.
Nuvama Institutional Equities also remain positive in the IT services sector in the medium to long-term, despite some short-term jitters as Gen AI disruption plays out to previous tech cycles for IT services players. Large players are likely to depend on IT services companies for Gen AI deployment, integration and scaling.
Choice pointed out that large enterprises are structurally slower in adopting AI, as mission-critical systems often involve multi-decade architectures and strict compliance requirements. This makes system integrators vital for implementation and governance. Firms certified at Capability Maturity Model Integration (CMMI) Level-5 may encounter productivity pressures, it noted.
Heavy selling in IT names was triggered by concerns that rapid progress in generative AI could curb demand for large-scale, human-driven coding and IT support services—core revenue sources for India’s software exporters. However, FIIs remained net buyers overall, purchasing about Rs 15,250 crore in Indian equities.
Sectors such as aerospace, defence, BFSI, healthcare, and government IT contracts are particularly impacted by these changes. Choice cited data security as another key constraint, with many global enterprises hesitant to share sensitive information due to privacy and regulatory concerns.
IT players are currently testing Gen AI via PoCs with gradual integration into outsourcing contracts and request for proposals (RFPs). AI led services are expected to command higher billing rates and Gen AI is likely to expand long-term industry technology acceptance model (TAM) despite concerns, Nuvama said.
The brokerage states that human oversight in critical processes remains essential to ensure compliance and accountability, even as AI introduces non-linearity in workforce structures. Overall, the sector is entering a structural transition and see midcaps better positioned. It has picked Coforge Ltd, Persistent Systems Ltd, Happiest Minds and KPIT Technologies as its top picks.