IT stocks to buy: Brokerage firm HDFC Securities has listed Indian IT stocks to buy ahead of upcoming second quarter earnings season (Q2 results FY27), which included
The brokerage has retained a positive stance on most of the IT stocks, with Larsen & Toubro Technology Services (LTTS), Mphasis and Coforge among the picks offering meaningful upside from current levels.
TCS has a new target price of ₹2,470, implying 20% upside, with an ‘ADD’ rating, while Infosys has a target of ₹1,250, offering 26% upside, and retains a ‘BUY’ rating, according to the firm.
HCL Technologies has a revised target of ₹1,370, implying 11% upside, with an ‘ADD’ rating, while Wipro has a ₹185 target, indicating 17% upside. Tech Mahindra has a target of ₹1,660, offering 9% upside, with an ‘ADD’ rating. Among the larger opportunities, L&T Technology Services has a revised target of ₹5,270, implying 30% upside, and retains a ‘BUY’ rating.
Mphasis has a target of ₹2,840, offering 32% upside, while Persistent Systems has a target of ₹6,070, implying 15% upside; both has been assigned ‘ADD’ rating by the brokerage firm.
Indian IT sector Q2 results FY27 preview
According to HDFC Securities Indian IT sector is expected to report weak growth in the second quarter of FY27, even though this period is usually considered a strong quarter for the industry.
Growth for large IT companies is estimated to range from a 0.4% decline to 2% growth sequentially, while mid-sized IT firms could see growth of 0.6% to 6.3%, partly helped by acquisitions, the firm said.
The firm further said that new business deals remain weak, while clients are taking longer to make decisions and continue to cut discretionary technology spending because of economic uncertainty. IT companies are also facing pricing pressure as clients increasingly expect them to pass on the cost savings from higher productivity through AI.
With the first half of FY27 likely to be weaker than expected, the sector’s recovery now depends heavily on the second half. However, the third quarter is usually weaker because of seasonal factors such as employee furloughs. This could limit the overall growth outlook for FY27.
“Despite weak near-term growth, valuations have fallen close to historical lows and free cash flow yields remain attractive. The brokerage has therefore reduced its revenue estimates for FY27-FY29 by around 0.4-0.6%, lowered valuation multiples by 1-2 times for some stocks, and shifted its valuation base to September 2028 earnings,” it said.
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