Tech Mahindra, Coforge, Persistent shares top IT picks: HDFC Securities

HDFC Securities has turned less cautious on information technology, moving the sector from underweight to market weight in its model portfolio and flagging a clutch of mid-cap names as its preferred way to play the rebound. The brokerage’s latest stance suggests that after a period of weakness, selective IT stocks are beginning to offer more compelling risk-reward than the sector’s larger, more crowded leaders.

A tactical shift in IT positioning

Speaking about the portfolio change, Devesh Wakani, Head of Prime Research at HDFC Securities, said the firm now prefers Tech Mahindra, Coforge and Persistent among the IT names under its coverage. He added that these are stocks where we have targets higher than the current market prices, underlining the brokerage’s conviction that upside remains on the table.

The shift is notable because HDFC Securities is not chasing the biggest software exporters. Instead, it is leaning into what Wakani described as “not the top four, but the mid-cap IT likes of Persistent, Coforge and Tech Mahindra.” In his view, that’s where he sees opportunities in the market.

Why this call matters now

The change comes at a time when Indian equities are navigating volatile global cues, uneven earnings momentum and a rotation in sector leadership. In the broader market conversation, IT has emerged as a beneficiary of mean reversion trades and improving sentiment after being beaten down earlier, making stock selection critical rather than broad-based sector buying.

HDFC Securities’ preference also reflects a more nuanced approach to the technology pack. Rather than simply adding exposure across the board, the brokerage appears to be backing companies where valuation comfort and earnings visibility can combine to drive re-rating.

Tech Mahindra in sharper focus

Among the three names, Tech Mahindra appears to have gained fresh traction within the brokerage’s framework. Wakani said HDFC Securities had recently come out with a report on Tech Mahindra with a higher target, indicating a renewed positive view on the stock’s near-to-medium-term potential.

That matters because the brokerage’s IT upgrade is not just a sectoral call; it is also a stock-specific one. The emphasis on covered names with explicit upside targets suggests the move to market weight is being executed through conviction bets rather than a passive allocation tweak.

Broader portfolio context

The IT recalibration sits alongside HDFC Securities’ continued preference for banking, financials and defence in its advised portfolios. But the latest commentary makes clear that within technology, the opportunity set is shifting toward selective mid-cap plays that could outperform if earnings recovery broadens and market sentiment stays supportive.

For investors, the message is straightforward: the brokerage is no longer underweight on IT, but it is still being highly selective about where the next leg of returns may come from.