IT Stocks Show Resilience After Year-to-Date Decline, Promising Investment Opportunities Emerge

Indian IT Services Industry Remains Resilient Amid GenAI Fears

Nuvama Institutional Equities, a leading brokerage firm, has released a report stating that the adoption of Generative AI (GenAI) does not pose an existential threat to the Indian IT services industry. Despite the recent correction in IT stocks, the firm remains positive on the sector from a medium to long-term perspective.

The Nifty IT index has plunged 21% since the beginning of the year, with large-cap IT stocks falling 20% and midcaps IT stocks correcting 25% over the same period. However, this correction has occurred despite a reasonable performance in Q3FY26 and an improving outlook, as demonstrated by strong deal-wins.

The sharp correction has made valuations highly attractive, said Nuvama, which now has a 'Buy' call on all the top-ten IT stocks. The firm upgraded its rating on HCL Technologies, Wipro, Tech Mahindra, and Hexaware Technologies to 'Buy'. It prefers Coforge, LTIMindtree, Persistent Systems, Mphasis, Infosys, and Tata Consultancy Services (TCS).

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Key Rating Changes:

• HCL Technologies: Upgraded to 'Buy' from 'Hold' with a target price of ₹1,550
• Wipro: Upgraded to 'Buy' from 'Hold' with a target price of ₹240
• Hexaware Technologies: Upgraded to 'Buy' with a reduced target price of ₹550
• TCS: Target price reduced to ₹3,300 from ₹3,750
• Infosys: Target price reduced to ₹1,650 from ₹1,900
• LTIMindtree: Target price reduced to ₹6,100 from ₹7,750
• Coforge: Target price reduced to ₹2,100 from ₹2,500
• Persistent Systems: Target price reduced to ₹6,000 from ₹7,700
• Mphasis: Target price reduced to ₹3,100 from ₹3,400