IT stocks to buy: TCS, Infy, TechM, HCL Tech, Persistent, Netweb, KPIT; Check target price
Equirus expects a muted Q1 for Indian IT companies but remains bullish on Infosys, TCS, Tech Mahindra, KPIT and Netweb. Check target prices and outlook.
- Jul 6, 2026,
- Updated Jul 6, 2026 3:19 PM IST
Indian IT stocks are likely to see a soft first quarter on the revenue front as volatile macro conditions, geopolitical issues and rising client demands to pass on AI-led productivity gains weigh on growth, according to a report by Equirus Securities. It said cautious spending on discretionary and new initiatives could delay meaningful scale-up in AI adoption and the return on investment that clients are seeking.
Equirus said the top six large IT companies are likely to report constant-currency organic US dollar sales ranging from a 1.7 per cent quarter-on-quarter (QoQ) decline to 1.1 per cent growth in Q1, with Wipro IT Services near the lower end and Tech Mahindra near the upper end. Among midcaps, it expects healthy organic quarter-on-quarter US dollar sales growth in Persistent, Mphasis and eClerx.
The brokerage said the top six large IT companies could report constant-currency consolidated US dollar sales between a 1.1 per cent decline and 1.7 per cent growth sequentially, with cross-currency headwinds affecting growth by flat to 30 basis points. It expects some midcap companies, including Persistent, Mphasis and eClerx, to post organic constant-currency US dollar sales growth of 2.4-3.1 per cent QoQ.
On margins, Equirus expects most largecaps to continue delivering good execution on EBIT margins in 1QFY27E, helped by foreign exchange tailwinds, benign supply-side conditions and gains from cost optimisation and productivity. It noted that the average rupee-dollar spot rate depreciated by about 3 per cent QoQ in 1QFY27.
According to Equirus, demand commentary from most vendors is likely to remain measured as macro and geopolitical uncertainties, along with their impact on inflation and interest rates, keep enterprise clients cautious on discretionary spending.
The brokerage said AI-led transformation spending is likely to be funded through cost takeout, outsourcing and vendor consolidation deals rather than a notable rise in IT budgets in the near term. It expects mixed trends in Q1 deal TCV and said management commentary on the transformation pipeline and growth outlook beyond Q1FY27E will be key.
Equirus also said valuations may remain measured in the near term despite a material sector correction in CY26 year-to-date and higher free cash flow yields, unless growth visibility improves consistently beyond Q1FY27E.
On guidance, Equirus expects Infosys to guide for 2.8-4.3 per cent constant-currency FY27E US dollar sales growth on a consolidated basis excluding the Vertex acquisition, with EBIT margin guidance unchanged at 20-22 per cent; HCLTech to maintain its 1.5-4.5 per cent services growth guidance and 17.5-18.5 per cent EBIT margin guidance; and Wipro to guide for a 2% decline to flat growth in constant-currency US dollar IT services revenue for 2QFY27E.
It added that IT services providers will remain critical in enterprise AI adoption, especially in brownfield work such as legacy modernisation, data engineering, incremental cloud adoption and cyber security guardrails, while complex hybrid AI architectures will continue to require system integrators. The brokerage said it remains selective, preferring Infosys and Tech Mahindra among largecaps and Mphasis and eClerx among midcaps.
Equirus has a 'Long' rating on Birlasoft (Target Price: Rs 434), Coforge (Target Price: Rs 1,410), Cyient (Target Price: Rs 1,105), eClerx (Target Price: Rs 2,040), Infosys (Target Price: Rs 1,460) Mphasis (Target Price: Rs 2,900), R Systems (Target Price: Rs 455), TCS (Target Price: Rs 2,935), Tech Mahindra (Target Price: Rs 1,695) and Zensar Technologies (Target Price: Rs 695).
It has an 'add' rating on KPIT Technologies (Target Price: Rs 715), L&T Technology Services (Target Price: Rs 3,865), LTIMindtree (Target Price: Rs 4,685) and Netweb Technologies (Target Price: Rs 4,110). On the other hand, it has given a 'reduce' rating on HCL Technologies (Target Price: Rs 1,415), Persistent Systems (Target Price: Rs 5,010) and Wipro (Target Price: Rs 208).
Indian IT stocks are likely to see a soft first quarter on the revenue front as volatile macro conditions, geopolitical issues and rising client demands to pass on AI-led productivity gains weigh on growth, according to a report by Equirus Securities. It said cautious spending on discretionary and new initiatives could delay meaningful scale-up in AI adoption and the return on investment that clients are seeking.
Equirus said the top six large IT companies are likely to report constant-currency organic US dollar sales ranging from a 1.7 per cent quarter-on-quarter (QoQ) decline to 1.1 per cent growth in Q1, with Wipro IT Services near the lower end and Tech Mahindra near the upper end. Among midcaps, it expects healthy organic quarter-on-quarter US dollar sales growth in Persistent, Mphasis and eClerx.
The brokerage said the top six large IT companies could report constant-currency consolidated US dollar sales between a 1.1 per cent decline and 1.7 per cent growth sequentially, with cross-currency headwinds affecting growth by flat to 30 basis points. It expects some midcap companies, including Persistent, Mphasis and eClerx, to post organic constant-currency US dollar sales growth of 2.4-3.1 per cent QoQ.
On margins, Equirus expects most largecaps to continue delivering good execution on EBIT margins in 1QFY27E, helped by foreign exchange tailwinds, benign supply-side conditions and gains from cost optimisation and productivity. It noted that the average rupee-dollar spot rate depreciated by about 3 per cent QoQ in 1QFY27.
According to Equirus, demand commentary from most vendors is likely to remain measured as macro and geopolitical uncertainties, along with their impact on inflation and interest rates, keep enterprise clients cautious on discretionary spending.
The brokerage said AI-led transformation spending is likely to be funded through cost takeout, outsourcing and vendor consolidation deals rather than a notable rise in IT budgets in the near term. It expects mixed trends in Q1 deal TCV and said management commentary on the transformation pipeline and growth outlook beyond Q1FY27E will be key.
Equirus also said valuations may remain measured in the near term despite a material sector correction in CY26 year-to-date and higher free cash flow yields, unless growth visibility improves consistently beyond Q1FY27E.
On guidance, Equirus expects Infosys to guide for 2.8-4.3 per cent constant-currency FY27E US dollar sales growth on a consolidated basis excluding the Vertex acquisition, with EBIT margin guidance unchanged at 20-22 per cent; HCLTech to maintain its 1.5-4.5 per cent services growth guidance and 17.5-18.5 per cent EBIT margin guidance; and Wipro to guide for a 2% decline to flat growth in constant-currency US dollar IT services revenue for 2QFY27E.
It added that IT services providers will remain critical in enterprise AI adoption, especially in brownfield work such as legacy modernisation, data engineering, incremental cloud adoption and cyber security guardrails, while complex hybrid AI architectures will continue to require system integrators. The brokerage said it remains selective, preferring Infosys and Tech Mahindra among largecaps and Mphasis and eClerx among midcaps.
Equirus has a 'Long' rating on Birlasoft (Target Price: Rs 434), Coforge (Target Price: Rs 1,410), Cyient (Target Price: Rs 1,105), eClerx (Target Price: Rs 2,040), Infosys (Target Price: Rs 1,460) Mphasis (Target Price: Rs 2,900), R Systems (Target Price: Rs 455), TCS (Target Price: Rs 2,935), Tech Mahindra (Target Price: Rs 1,695) and Zensar Technologies (Target Price: Rs 695).
It has an 'add' rating on KPIT Technologies (Target Price: Rs 715), L&T Technology Services (Target Price: Rs 3,865), LTIMindtree (Target Price: Rs 4,685) and Netweb Technologies (Target Price: Rs 4,110). On the other hand, it has given a 'reduce' rating on HCL Technologies (Target Price: Rs 1,415), Persistent Systems (Target Price: Rs 5,010) and Wipro (Target Price: Rs 208).