IT stocks remained in focus on Friday as multiple downgrades weighed on the sector. The Nifty IT index dipped 1 per cent in the session to an intraday low of 30,337, compared with Thursday’s close, and was down over 3 per cent on a weekly basis from 31,357.75 recorded on August 14.
At the time of writing, LTM (LTIMindtree), Oracle Financial Services Software, HCL Technologies, Tech Mahindra and Wipro were trading in the red. TCS, Persistent Systems, Infosys, Mphasis and Coforge showed resilience.
Kotak downgrades IT stocks
Kotak Institutional Equities downgraded TCS, Infosys and LTM, citing industry headwinds, client-specific issues and concerns over near-term growth.
Kotak downgraded Infosys to add from buy, with a target price of ₹1,200. It also downgraded TCS to add from buy, with a target price of ₹2,450.
LTM was downgraded to sell from reduce, with a target price of ₹4,150, after a sharp rally in stock prices from recent lows.
Kotak said four themes had emerged from the recent chain of events: high pricing pressure as deals remain insufficient to support growth aspirations for all; reduced concerns related to the terminal value of IT services, providing a floor to valuations; the continuing debate between open source and closed models, with open-weight models raising service intensity and driving faster adoption and deflation; and challengers continuing to gain wallet share.
The brokerage’s preferred picks are Tech Mahindra, Coforge, Hexaware and Indegene.
CLSA cuts ratings
CLSA also recently downgraded some larger IT names, citing a difficult operating environment as AI-led deflation weighs on legacy managed services, while macroeconomic headwinds continue to cloud technology spending.
CLSA downgraded Infosys to hold from outperform, while raising its target price to ₹1,147 from ₹1,109. TCS was also cut to hold from outperform, with the target price raised to ₹2,326 from ₹2,165.
Tech Mahindra was downgraded to hold, with a target price of ₹1,634.
CLSA’s more constructive view is reserved for mid-tier IT companies, which it believes are better positioned to benefit from major shifts in technology spending and AI adoption.
Persistent Systems remains a high conviction outperform, with CLSA raising its target price to ₹6,246 from ₹6,166. Coforge also retains a high conviction outperform rating, with a target price of ₹2,170.
The brokerage maintained outperform on LTM and Hexaware, while raising their target prices to ₹5,534 and ₹730, respectively.
Published on August 21, 2026
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