IT Stocks In Focus As CLSA Raises Target Prices — Most Bullish On Persistent, Coforge, LTIMindtree

Brokerage firm CLSA has raised its share price targets for eight information technology stocks, while revising recommendations on two, just days before the third quarter earnings season kicks in.

The most bullish upside is projected for Persistent Systems Ltd., Coforge Ltd. and LTIMindtree Ltd. due to stronger earnings growth backed by credible management execution. Persistent remains delinked to macro with strong capabilities and execution, analysts said.

Among large caps, CLSA prefers Tech Mahindra and Infosys Ltd. over HCLTech and Wipro Ltd. The outlook for Tata Consultancy Services Ltd. is weighed unless it shows strong earnings growth and plug market share losses.

Analysts downgraded HCLTech Ltd. and Tech Mahindra Ltd. given a lack of concrete signs of a major turnaround in order bookings and market share gains, as well as limited upside from current levels.

A weak rupee against the US dollar will imply tailwinds for revenues in INR for Indian IT companies versus USD revenue growth. CLSA has raised EPS estimates for most of their IT coverage but made some cuts to constant currency growth estimates for large cap players.

• HCLTech: Superior growth and strong Q3 seasonality priced-in. The brokerage downgraded the stock to 'Hold' from 'Outperform' and hiked target price to Rs 1,692 (3.5% upside) from Rs 1,660.

• Tech Mahindra: FY27 vision insight, EPS delivery muted. The brokerage downgraded the stock to 'Outperform' from 'High Conviction Outperform' and raised TP to Rs 1,705 (6.1% upside) from Rs 1,695.

• Coforge: Fear over large acquisitions presents accumulation opportunity. The brokerage maintained 'Outperform' and raised TP to Rs 2,411 (45.6% upside) from Rs 2,275.

• Persistent Systems: De-linked to macro and in its own league. The brokerage maintained 'High Conviction Outperform' and hiked TP to Rs 8,731 (45.6% upside) from Rs 8,270.

• LTIMindtree – Momentum under the new CEO, structural strength coming to fore. The brokerage maintained 'Outperform' and raised TP to Rs 7,064 (15.5% upside) from Rs 6,899.

• TCS: Better US growth prospects for 2026 should help a growth revival. The brokerage maintained 'Outperform' and hiked TP to Rs 3,601 (11.6% upside) from Rs 3,559.

• Infosys: Best placed to capitalize on US discretionary demand revival. The brokerage maintained 'Outperform' and raised TP to Rs 1,814 (11.3% upside) from Rs 1,779.

• Wipro: Order book to revenue conversion remains poor. The 'Hold' rating has been retained and target price raised to Rs 237 (11.3% downside) from Rs 236.