IT Index Declines 1.1% Amid Losses for HCLTech and Coforge, Target Prices Slashed for Seven Stocks

Indian IT Sector Takes a Hit Amid Stronger Rupee

On March 5, the Nifty IT index declined 1.3% to 29,909, with HCLTech, Coforge, and Mphasis shares falling 2% each, despite overall market gains. The Indian rupee rallied 0.6% to 91.62 per dollar, its highest level since the RBI's recent intervention.

The stronger rupee is a headwind for export-focused IT services firms, which saw a 20% decline in February, the worst month since 2008. Concerns over artificial intelligence-related disruptions triggered by Anthropic's AI tools weighed on the sector. Kotak Institutional Equities noted that the weak transmission of tech spend to services keeps industry growth moderate.

Kotak Institutional Equities has revised its target prices for seven IT stocks:

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• Persistent Systems: Downgraded to 'Reduce' from 'Sell', target price cut to Rs 4,615 from Rs 5,900.
• TCS: 'Buy' call, target price cut to Rs 3,090 from Rs 3,675.
• Infosys: 'Buy' Call, target price cut to Rs 1,530 from Rs 1,900.
• Wipro: 'Sell' Call, target price cut to Rs 190 from Rs 240.
• HCLTech: 'Reduce' Call, target price cut to Rs 1,425 from Rs 1,680.
• Tech Mahindra: 'Buy' Call, target price cut to Rs 1,615 from Rs 2,000.
• Coforge: 'Buy' Call, target price cut to Rs 1,620 from Rs 2,250.