TCS, Infosys shares on hold? Time to buy midcap IT stocks, says Antique | Target prices

Antique Stock Broking has maintained 'Hold' ratings on largecap IT services companies, while preferring select midcap stocks such as Coforge and Mphasis in its latest strategy note.  Antique said commentary from US retailers remained cautious, as the benefits from tax refunds fade and macroeconomic uncertainties, including higher energy prices and geopolitical risks, persist. On the technology front, it said, the focus remains on either deploying artificial intelligence (AI) into production or actively scaling existing AI initiatives.

"The narrative has shifted from experimentation to monetization and operational leverage. Technology and AI are increasingly being positioned as structural margin drivers rather than merely cost centers," it said.

Antique said the implications for IT services providers and GCCs are directionally negative over the medium term. Rather than a sudden disruption, the industry is likely to experience a gradual erosion of traditional services such as application management, support, testing, quality assurance, and reporting areas that have historically formed the core of offshore IT services engagements, Antique said.

Among largecaps, Antique suggested a target of Rs 2,900 on TCS, Rs 1,390 on Infosys, Rs 1,430 on HCL Tech, Rs 225 on Wipro, Rs 1,550 on Tech Mahindra (TechM), assigning all with 'Hold' rating.

LTM, Coforge, Mphasis and Cyient - DET and Firstsource are rated 'Buy', with targets of Rs 5,625, Rs 1,875, Rs 3,050, Rs 1,100 and Rs 340, respectively. LTTS, Persistent Systems, Zensar and Birlasoft are rated 'Hold' with targets of Rs 3,875, Rs 5,400, Rs 580 and Rs 355, respectively.

Antique said while the retail vertical improved sequentially through FY26 and the management commentaries suggest further recovery in 1HFY27.

Client spending remains focused on digital commerce, supply chain modernization, and AI-led productivity initiatives, while a broad-based recovery in discretionary spending remains gradual, Antique said.

The domestic brokerage said the retail vertical is showing signs of gradual stabilization, supported by improving deal pipelines and increasing investments in AI-led transformation. However, spending remains selective as retailers continue to prioritize cost optimization, vendor consolidation, and automation over discretionary technology investments.

"While the US retail sector showed improvement during the March quarter and most companies either maintained or raised guidance, we expect the vertical to deliver low-to-mid single-digit growth in FY27. Within our coverage universe," it said.