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6 IT stocks that could rally up to 40% in 2026? Brokerage names top picks – See list
- Written by Ankit Kumar
Published: Zee Business| Updated: Zee Business
IT Stocks To Buy: After nearly three years of sluggish growth and muted earnings across the Indian IT sector, analysts are finally spotting clear signs of a turnaround from 2026. The recovery, they say, will not be driven by traditional outsourcing but by the rapid scale-up of AI-led services - a segment that is beginning to show meaningful deal traction. Against this backdrop, brokerage house HDFC Securities has identified six IT stocks that it believes could deliver up to 40 per cent upside over the next 12 months, as enterprises worldwide accelerate AI spending and digital transformation programmes. The brokerage has highlighted companies with strong balance sheets, stable client portfolios and the ability to convert AI pilots into large-scale deployments - a trend it expects to define the sector’s next growth cycle. The brokerage’s list includes Tech Mahindra, Mphasis, Birlasoft, LTIMindtree and Tata Elxsi - all recommended with a Buy rating.
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1. Tech Mahindra
1/6HDFC Securities expects Tech Mahindra to benefit as discretionary spending picks up gradually through 2026. The brokerage has set a Rs 1,800 target price, implying moderate upside from current levels. Analysts believe the company’s renewed focus on large deals, a sharper turnaround strategy in its communications vertical and improving deal momentum position it well for the next leg of growth. Despite a weak start to the year, the brokerage expects margins to improve as cost resets and restructuring benefits flow through.
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2. Mphasis
2/6Mphasis remains one of the brokerage’s preferred ideas within mid-tier IT, supported by its exposure to BFSI clients and a steady ramp-up in digital transformation work. HDFC Securities has assigned a Rs 3,460 target, noting that a recovery in US banking and insurance spending could materially lift the company’s order book. The firm expects Mphasis to see a valuation re-rating as AI-led modernisation projects begin to scale through FY26.
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3. LTI Mindtree
3/6For LTIMindtree, the brokerage has set a Rs 7,500 target, citing improving growth visibility across travel, retail, communications and global tech clients. Analysts note that the company has managed to widen its deal pipeline even during a muted macro environment. With cost discipline holding steady and large clients restarting transformation spends, LTIMindtree is seen as one of the strongest candidates to benefit from the sector’s cyclical rebound.
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4. Birlasoft
4/6HDFC Securities believes Birlasoft is entering a favourable phase, supported by a broader service mix and a renewed push towards cloud, engineering and AI-led work. The brokerage has issued a Rs 520 target price, expecting meaningful upside as the company closes the gap with peers on deal wins and profitability. After a volatile year, analysts say the stock has room for expansion as earnings stabilise.
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5. Tata Elxsi
5/6After a significant correction over the past year, Tata Elxsi is back on the radar for long-term investors. The brokerage has placed a Rs 6,400 target, arguing that the company’s leadership in design, embedded systems and automotive software gives it a strong foundation for AI-driven opportunities. Analysts say the recent decline in the stock price offers a more reasonable entry point ahead of a likely pick-up in mobility and media verticals.
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6. Disclaimer
6/6The views, suggestions and recommendations expressed in this article are solely those of investment experts. Zee Business advises readers to consult their financial advisers before taking any investment decision.
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