TCS, Infosys, LTIM, HCL Tech, Wipro, LTTS: Why JP Morgan trims targets ahead of Q4 results
JP Morgan believes that revenue guidance of IT will be the most important factor for the sector, marking the first time in nearly eight years this has been the case, amid widespread pessimism.
- Mar 24, 2026,
- Updated Mar 24, 2026 3:00 PM IST
Amid the rising concerns around AI, JP Morgan has released its first set of previews for India’s IT sector for the fourth quarter of financial year 2026 (Q4FY26). The global brokerage believes that revenue guidance will be the most important factor for the sector, marking the first time in nearly eight years this has been the case, amid widespread pessimism.
The firm pointed out that guidance for FY27 will play a crucial role in addressing investor concerns around artificial intelligence-driven pricing pressure, referred to as 'AI compression'. Any signs of growth acceleration could help restore confidence in the sector. Nifty IT index has tanked 25 per cent in 2026 so far, compared to a 12 per cent correction in Nifty50.
For FY27, JP Morgan expects Infosys Ltd to report revenue growth between 2-5 per cent, while HCL Technologies Ltd is projected to grow by 3-6 per cent. Wipro Ltd, on the other hand, is forecast to report sequential growth ranging from -2-0 per cent.
Looking at Q4FY26, JP Morgan anticipates a relatively healthy quarter overall, although some companies may fall short of earlier expectations. The brokerage noted selective headwinds, including geopolitical uncertainties and disruptions related to artificial intelligence, which have affected deal ramp-ups and closures so far.
In constant currency terms on a quarter-on-quarter basis, Tata Consultancy Services Ltd (TCS) is expected to post growth of 0.6 per cent, whereas Infosys may see a decline of 0.7 per cent. HCL Technologies and Wipro are likely to report declines of 1.6 per cent and 1.3 per cent, respectively. The sector’s last twelve months growth is estimated at 1.5 per cent.
Among mid-cap IT companies, Tata Technologies Ltd is expected to lead with a 4.4 per cent quarter-on-quarter growth in constant currency terms, followed by Persistent Systems at 4 per cent and Mphasis at 2 per cent. Tata Elxsi and Cyient Ltd are forecast to grow by 1.5 per cent and 1 per cent , respectively, while Hexaware may see a slight decline of 0.5 per cent.
JP Morgan has lowered its revenue estimates across the IT sector, citing limited visibility on a demand recovery. The brokerage revised its medium-term growth assumptions downwards, now expecting large-cap IT firms to grow around 3 per cent, compared to 4 per cent earlier, and mid-cap companies at 5 per cent, down from 6 per cent.
The revision has also led to a 25 per cent cut in target price-to-earnings multiples. JP Morgan does not expect large IT services companies to return to their long-term average growth rates of 7-8 per cent in the medium term. However, the sharp depreciation of the Indian rupee against the US dollar is expected to provide some cushioning against earnings downgrades.
JP Morgan has trimmed targets for the majority of the IT companies. It has maintained its 'overweight' stance of TCS (Target price revised to Rs 3,150 from Rs 4,200), Infosys (Target price revised to Rs 1,550 from Rs 2,050), LTIMindTree (Target price revised to Rs 5,100 from Rs 7,000), Mphasis (Target price revised to Rs 2,600 from Rs 3,300), Persistent Systems (Target price revised to Rs 6,000 from Rs 8,000) Cyient (Target price revised to Rs 1,200 from Rs 1,500) and KPIT Technologies Ltd (Target price revised to Rs 850 from Rs 1,350).
It has a 'neutral' view on HCL Technologies (Target price revised to Rs 1,410 from Rs 1,690), Wipro (Target price revised to Rs 200 from Rs 270), Hexaware Technologies (Target price revised to Rs 470 from Rs 640), L&T Technology Services (Target price revised to Rs 3,500 from Rs 4,650).
Amid the rising concerns around AI, JP Morgan has released its first set of previews for India’s IT sector for the fourth quarter of financial year 2026 (Q4FY26). The global brokerage believes that revenue guidance will be the most important factor for the sector, marking the first time in nearly eight years this has been the case, amid widespread pessimism.
The firm pointed out that guidance for FY27 will play a crucial role in addressing investor concerns around artificial intelligence-driven pricing pressure, referred to as 'AI compression'. Any signs of growth acceleration could help restore confidence in the sector. Nifty IT index has tanked 25 per cent in 2026 so far, compared to a 12 per cent correction in Nifty50.
For FY27, JP Morgan expects Infosys Ltd to report revenue growth between 2-5 per cent, while HCL Technologies Ltd is projected to grow by 3-6 per cent. Wipro Ltd, on the other hand, is forecast to report sequential growth ranging from -2-0 per cent.
Looking at Q4FY26, JP Morgan anticipates a relatively healthy quarter overall, although some companies may fall short of earlier expectations. The brokerage noted selective headwinds, including geopolitical uncertainties and disruptions related to artificial intelligence, which have affected deal ramp-ups and closures so far.
In constant currency terms on a quarter-on-quarter basis, Tata Consultancy Services Ltd (TCS) is expected to post growth of 0.6 per cent, whereas Infosys may see a decline of 0.7 per cent. HCL Technologies and Wipro are likely to report declines of 1.6 per cent and 1.3 per cent, respectively. The sector’s last twelve months growth is estimated at 1.5 per cent.
Among mid-cap IT companies, Tata Technologies Ltd is expected to lead with a 4.4 per cent quarter-on-quarter growth in constant currency terms, followed by Persistent Systems at 4 per cent and Mphasis at 2 per cent. Tata Elxsi and Cyient Ltd are forecast to grow by 1.5 per cent and 1 per cent , respectively, while Hexaware may see a slight decline of 0.5 per cent.
JP Morgan has lowered its revenue estimates across the IT sector, citing limited visibility on a demand recovery. The brokerage revised its medium-term growth assumptions downwards, now expecting large-cap IT firms to grow around 3 per cent, compared to 4 per cent earlier, and mid-cap companies at 5 per cent, down from 6 per cent.
The revision has also led to a 25 per cent cut in target price-to-earnings multiples. JP Morgan does not expect large IT services companies to return to their long-term average growth rates of 7-8 per cent in the medium term. However, the sharp depreciation of the Indian rupee against the US dollar is expected to provide some cushioning against earnings downgrades.
JP Morgan has trimmed targets for the majority of the IT companies. It has maintained its 'overweight' stance of TCS (Target price revised to Rs 3,150 from Rs 4,200), Infosys (Target price revised to Rs 1,550 from Rs 2,050), LTIMindTree (Target price revised to Rs 5,100 from Rs 7,000), Mphasis (Target price revised to Rs 2,600 from Rs 3,300), Persistent Systems (Target price revised to Rs 6,000 from Rs 8,000) Cyient (Target price revised to Rs 1,200 from Rs 1,500) and KPIT Technologies Ltd (Target price revised to Rs 850 from Rs 1,350).
It has a 'neutral' view on HCL Technologies (Target price revised to Rs 1,410 from Rs 1,690), Wipro (Target price revised to Rs 200 from Rs 270), Hexaware Technologies (Target price revised to Rs 470 from Rs 640), L&T Technology Services (Target price revised to Rs 3,500 from Rs 4,650).