<\/p>
Choice Institutional Equities, in its recent note, stated Q1 FY27 is shaping up to be another weak quarter for the Indian IT sector, with demand conditions deteriorating rather than stabilising, indicating that the expected recovery has been pushed further out.<\/p>
It added that persistent macro uncertainty, slower enterprise decision-making, elevated AI-led productivity pass-throughs and geopolitical disruption have kept discretionary spending under pressure, resulting in muted sequential growth across the sector.<\/p>
The domestic brokerage expects large-cap IT companies to report broadly flat to marginally negative constant-currency (CC) growth, while mid-tier companies should once again outperform on the back of deal ramp-ups and market share gains.<\/p>
“With H1 FY27 growth tracking below the run-rate required to meet annual guidance, we can expect further estimate revision and selective guidance resets in the next few quarters,” Choice stated.<\/p>
“Accordingly, we cut our FY27\u201328 earnings estimate (0.1 per cent\u201316.7 per cent) across the sector to reflect a slower demand recovery, weaker discretionary spending and higher AI-led revenue deflation, while reducing target multiples and fair values (0 per cent\u201321.6 per cent) to incorporate weaker medium-term growth visibility and higher execution risk. Although sector valuations have corrected meaningfully and downside appears increasingly limited, we believe a sustained re-rating will require a clear evidence of demand stabilisation, accelerating revenue growth and commercial monetisation of GenAI beyond productivity-led cost takeout,” it further said.<\/p>
Stock-wise, the brokerage has revised its recommendation on five IT counters — HCLTechnologies Ltd, Mphasis Ltd, Persistent Systems Ltd, Tech Mahindra Ltd and Zensar Technologies Ltd.<\/p>
Choice upgraded HCLTech to ‘Buy’ from ‘Add’, while trimming its target price to Rs 1,410 from Rs 1,500.<\/p>
In contrast, it downgraded Mphasis, Persistent, TechM and Zensar Tech to ‘Add’. The revised target prices are Rs 2,520 for Mphasis, Rs 5,010 for Persistent, Rs 1,600 for TechM and Rs 560 for Zensar Tech.<\/p>
Besides these stocks, the brokerage maintained its ‘Buy’ ratings on Tata Consultancy Services Ltd (TCS), Infosys Ltd and Happiest Minds Technologies Ltd, while reducing their target prices to Rs 2,625, Rs 1,360 and Rs 440, respectively. It also retained its ‘Buy’ call on Coforge Ltd with an unchanged target price of Rs 1,900.<\/p>
Additionally, Choice maintained its ‘Add’ rating on Wipro Ltd, while lowering its target price to Rs 185.<\/p> <\/div>
Disclaimer: Business Today provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.<\/i><\/p>
HCLTech, Mphasis, Persistent, Tech Mahindra, Zensar Tech, HCLTech target price, Mphasis target price, Persistent target price, Tech Mahindra target price, Zensar Tech target price, Which IT stocks to buy, IT stocks to buy, IT stocks#HCLTech #Mphasis #Persistent #Tech #Mahindra #Zensar #Tech #Brokerage #revises #ratings #share #price #targets1783224739<\/p> ","protected":false},"excerpt":{"rendered":"
Choice Institutional Equities, in its recent note, stated Q1 FY27 is shaping up to be another weak quarter for the Indian IT sector, with demand conditions deteriorating rather than stabilising, indicating that the expected recovery has been pushed further out. It added that persistent macro uncertainty, slower enterprise decision-making, elevated AI-led productivity pass-throughs and geopolitical […]<\/p>\n","protected":false},"author":1,"featured_media":10981,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[37],"tags":[4143,2216,43802,8982,22540,806,4814,43803,18960,43804,1782,3963,9367,495,1783,1658,8846,43805,43807,43808,43801,43806],"class_list":["post-10980","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-content-marketing","tag-brokerage","tag-hcltech","tag-hcltech-target-price","tag-it-stocks","tag-it-stocks-to-buy","tag-mahindra","tag-mphasis","tag-mphasis-target-price","tag-persistent","tag-persistent-target-price","tag-price","tag-ratings","tag-revises","tag-share","tag-targets","tag-tech","tag-tech-mahindra","tag-tech-mahindra-target-price","tag-which-it-stocks-to-buy","tag-zensar","tag-zensar-tech","tag-zensar-tech-target-price"],"acf":[],"_links":{"self":[{"href":"http:\/\/longzhuplatform.com\/index.php?rest_route=\/wp\/v2\/posts\/10980","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/longzhuplatform.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/longzhuplatform.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/longzhuplatform.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/longzhuplatform.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=10980"}],"version-history":[{"count":0,"href":"http:\/\/longzhuplatform.com\/index.php?rest_route=\/wp\/v2\/posts\/10980\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/longzhuplatform.com\/index.php?rest_route=\/wp\/v2\/media\/10981"}],"wp:attachment":[{"href":"http:\/\/longzhuplatform.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=10980"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/longzhuplatform.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=10980"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/longzhuplatform.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=10980"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}