TCS, Infosys, HCL Tech, TechM, Wipro, Coforge, LTTS: IT stocks to buy— Check price target

Indian IT stocks were seen bleeding on Wednesday, after a short-lived rebound on Tuesday. Nifty IT index tumbled as much as 6 per cent during the session, with all 11 constituents trading in red. Tata Consultancy Services Ltd (TCS), the biggest IT company in India, led the laggards, falling more than 9 per cent. Centrum Broking continue to remain positive on select IT stock post Q4 results.

Indian IT services companies posted in-line performance in Q4FY26, with broad-based sequential revenue growth supported by steady execution of existing programmes, ramp-up of previously won deals and improving demand in select verticals, according to Centrum Broking.

It said revenue growth remained steady for most firms, while Tier 2 players continued to outperform larger peers because of stronger exposure to digital engineering, BFSI and niche transformation programmes. Centrum Broking said margins across the sector were largely resilient, helped by higher utilisation, automation benefits, offshore delivery leverage and ongoing cost optimisation.

However, investments in talent, capability building and some project transitions weighed on profitability for a few companies. Deal momentum remained healthy, with management commentary pointing to sustained traction in cost optimisation engagements, cloud modernisation, data platforms and AI-led initiatives.
 

AI-led deal momentum gains traction
Centrum Broking said revenue trends in Q4FY26 were steady across most IT service providers, backed by ramp-up of large deal wins, better execution and rising traction in AI-led transformation programmes. While discretionary spending remained selective, enterprises continued to prioritise investments in productivity, cloud modernisation and AI adoption.

Demand trends strengthened across BFSI and Technology, while deal wins stayed healthy, driven by vendor consolidation, platform modernisation and efficiency-focused initiatives. Revenue conversion was stable, although client decision-making remained measured in some areas. Tier 1 companies reported modest to healthy sequential growth, while Tier 2 players outperformed on strong execution and digital engineering demand.
 

Margins remain broadly stable
On profitability, Centrum Broking said EBIT margins in Q4FY26 remained broadly stable across the sector, supported by operational efficiencies, higher utilisation, automation benefits and a favourable delivery mix. Margin performance varied by company due to wage hikes, investments in AI capabilities, deal transition costs and selective growth investments.

Companies continued to focus on cost optimisation, pyramid rationalisation and offshore leverage to protect profitability. Low attrition levels also supported delivery stability and workforce productivity. Management commentary, according to Centrum, highlighted AI-led productivity gains as an increasingly important margin lever along with disciplined execution of large deals.
 

FY27 outlook stays constructive
Looking ahead, Centrum Broking expects business momentum to improve gradually through FY27, supported by the ramp-up of recently won large deals, improving deal conversion and increasing adoption of AI-led transformation initiatives. BFSI and Technology are expected to continue showing healthy demand trends, driven by modernisation programmes, productivity-focused spending and cloud adoption.

While discretionary spending remains selective in some verticals, client focus on cost optimisation, automation and operational efficiency continues to support technology investments. The brokerage said the deal pipeline remains robust, with growing traction in AI, data, cybersecurity and platform transformation engagements.

Overall, Centrum Broking said Q4FY26 commentary points to a stable demand environment going into FY27, supported by a healthy deal pipeline, improving client engagement and gradual normalisation in discretionary technology spending. Its top picks in Tier 1 IT are Infosys and TCS, while in Tier 2 it prefers Coforge, LTM and Persistent Systems.

Centrum has a 'buy' rating on TCS (Target Price: Rs 3,841), Infosys Ltd (Target Price: Rs 1,794), HCL Technologies (Target Price: Rs 1,612), Tech Mahindra (Target Price: Rs 1,664), LTM (Target Price: Rs 6,178), Coforge Ltd (Target Price: Rs 1,917), Persistent Systems Ltd (Target Price: Rs 6,566) and Happiest Minds (Target Price: Rs 584).

It has a 'neutral' rating on Wipro Ltd (Target Price: Rs 220), L&T Technology Services (Target Price: Rs 3,721) and Mphasis (Target Price: Rs 2,394).