HCLTech’s rating has been upgraded to “buy” from the earlier “hold” rating but its price target has been cut to ₹1,550 from ₹1,700 earlier.
Wipro has also been upgraded to “buy” from “hold” with a trimming of its price target to ₹240 from ₹255.The rating on Tech Mahindra has also been upgraded to “buy” from “hold” with an unchanged price target of ₹1,650, while Hexaware is the other upgrade to “buy” with a further trimming of its price target to ₹550 from ₹690 earlier.
| Stock | Rating | Old Target (₹) | New Target (₹) |
| HCLTech | Buy From Hold | 1,700 | 1,550 |
| Wipro | Buy From Hold | 255 | 240 |
| Tech Mahindra | Buy From Hold | 1,650 | 1,650 |
| Hexaware Tech | Buy From Hold | 690 | 550 |
Nuvama quoted Mark Twain who once said “reports of my death are greatly exaggerated” as the current state of India’s IT industry.”Given the advent and adoption of Gen-AI, obituaries of Indian IT Services industry are being written all around,” Nuvama said in its note, adding that the concerns have been amplified by the sharp stock reactions, first seen in global SaaS companies, which spilled over to Indian IT Services companies as well.
The Nifty IT index is down over 20% in just the first two months of the new calendar year. Every constituent of the index is trading with double-digit losses, from 12% to as high as 30%.
The brokerage believes that the requirement for a system integrator, which can customize and enterprise plug-and-play software’s input and output as per its requirements, will always exist. “Eventually, enterprises going for automation of tasks shall still need someone to take ownership of the system, and that will be IT services firms,” the note stated.
Nuvama further stated that the IT services model is here to stay and that the Gen-AI disruption would only lead to more bigger opportunities for them. After the correction seen so far, the valuations of these stocks are highly attractive, according to Nuvama. However, it has lowered the price targets for these stocks to factor in risks from possible Gen-AI disruptions.
Here’s is a look at Nuvama’s recommendations in detail:
| Stock | Rating | Price Target (₹) | Upside Potential (%) |
| Coforge | Buy | 2,100 | 84 |
| Mphasis | Buy | 3,100 | 42 |
| LTIMindtree | Buy | 6,100 | 41 |
| TCS | Buy | 3,300 | 31 |
| Infosys | Buy | 1,650 | 27 |
| Persistent | Buy | 6,000 | 26 |
| Tech Mahindra | Buy | 1,650 | 24 |
| Hexaware | Buy | 550 | 24 |
| Wipro | Buy | 240 | 21 |
| HCL Tech | Buy | 1,550 | 14 |
