90% returns in IT stocks? Despite Citi, CLSA, Jefferies target cuts, these shares could deliver sharp gains — Full list

IT Stocks To Buy: There seems to be no respite for IT stocks as global brokerages continued to cut target prices amid concerns over growth, valuations and the impact of artificial intelligence.

Citi has now joined CLSA, HSBC and Jefferies in trimming targets across large-cap and mid-cap IT names. Below are the key takeaways:

Citi joins target cut cycle, stays cautious

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Citi said the NSE IT index has corrected about 19 per cent calendar year-to-date and underperformed the Nifty by around 16 per cent. It maintained a cautious stance and lowered target multiples due to increased risks to medium-term growth.

On Infosys, it maintained ‘Neutral’ and cut the target price by about 15 per cent to Rs 1,440 from Rs 1,700. The revised target implies an upside of around 11 per cent from the current price of Rs 1,295.80.

For TCS, it retained ‘Sell’ and reduced the target by about 17 per cent to Rs 2,500 from Rs 3,020. The new target indicates a downside of about 5 per cent from Rs 2,620.80.

On HCL Technologies, Citi maintained ‘Neutral’ and cut the target by nearly 14 per cent to Rs 1,460. The revised target suggests an upside of around 6 per cent from Rs 1,383.70.

It maintained ‘Sell’ on Tech Mahindra and trimmed the target by about 16 per cent to Rs 1,260, implying a downside of around 7 per cent.

On Wipro, it cut the target by about 21 per cent to Rs 185 and maintained ‘Sell’, indicating a downside of around 7 per cent from Rs 199.82.

For Coforge, Citi slashed the target by nearly 29 per cent to Rs 1,100 and retained ‘Sell’, implying a downside of about 8 per cent.

On Mphasis, it cut the target by around 20 per cent to Rs 2,335 and maintained ‘Neutral’. The revised target implies a marginal upside of about 2 per cent from Rs 2,299.40.

Target cuts, but upside remains in select names

Despite trimming targets, some brokerages continue to see upside from current levels.

CLSA maintained ‘Accumulate’ on Infosys with a revised target of Rs 1,653, implying an upside of around 28 per cent. It retained ‘Accumulate’ on TCS with a target of Rs 3,333, suggesting an upside of about 27 per cent.

On HCL Technologies, CLSA maintained ‘Hold’ with a target of Rs 1,506, implying an upside of nearly 9 per cent. For Tech Mahindra, it kept ‘Accumulate’ with a target of Rs 1,698, indicating an upside of about 25 per cent.

CLSA maintained ‘Buy’ on Persistent Systems with a target of Rs 8,058, suggesting an upside of about 69 per cent from Rs 4,780.50. It also retained ‘Buy’ on Coforge with a target of Rs 2,278, implying an upside of over 90 per cent.

On LTI Mindtree, it maintained ‘Accumulate’ with a target of Rs 6,304, indicating an upside of about 41 per cent from Rs 4,469.10.

HSBC flags higher AI deflation risk

HSBC said it expects 14-16 per cent gross deflationary risk from AI over the next few years for overall sector revenues, higher than its earlier estimate of 8-10 per cent.

It said proactive companies could offset the impact through new revenue streams and still deliver mid-single digit growth. It added that US corporate results remain strong and provide a supportive macro backdrop for IT spending in 2026. However, it said valuations are not cheap in absolute terms.

Jefferies downgrades on structural risks

Jefferies said AI may structurally alter the IT services business mix towards consulting and implementation, while shrinking managed services. It cut earnings estimates by 1-4 per cent and reduced price targets by up to 33 per cent.

It downgraded Infosys to ‘Hold’ with a target of Rs 1,290, implying a marginal downside from current levels. TCS was downgraded to ‘Underperform’ with a target of Rs 2,350, indicating a downside of around 10 per cent.

It also downgraded HCL Technologies and Mphasis to ‘Hold’ and lowered targets sharply. LTI Mindtree was downgraded to ‘Underperform’ with a target of Rs 4,300, implying a downside from current levels.

Narrative hinges on earnings turnaround

Brokerages said that while AI could create long-term opportunities in consulting and system integration, near-term earnings growth remains under pressure. CLSA said a turnaround in earnings per share growth, rather than management commentary, may change the sector narrative. It added that stock prices could see another 5-10 per cent downside.