Choice Institutional Equities in a latest note suggested that Indian technology labour market is undergoing a structural reallocation rather than a cyclical slowdown. It said while aggregate white-collar hiring growth moderated to 1 per cent YoY and IT hiring declined 7 per cent YoY in May, the weakness remains concentrated in volume-led and lower-skilled hiring categories. 

"In contrast, demand for specialised talent continues to remain strong, particularly across AI/ML, data engineering, cloud, cybersecurity and platform engineering roles," Choice Institutional Equities said.

Choice said enterprises are recalibrating technology spending towards high-impact, outcome-oriented talent capable of driving AI adoption and digital transformation initiatives. As a result, it believes the traditional talent pyramid is gradually evolving into a diamond-shaped workforce structure, characterised by a larger concentration of experienced and specialised professionals. 

"We believe this trend is supportive for IT services firms with differentiated AI capabilities, digital engineering providers, ER&D players and premium technology staffing platforms, while demand for generalist and entry-level technology roles is likely to remain structurally challenged. Our long-term investment ideas are Coforge, Persistent Systems, Happiest Minds Technologies Ltd and KPIT Tech," Choice Institutional Equities said.

Evaluating May 2026 Naukri Jobseek hiring data, Choice said AI hiring remained resilient despite broad-based demand weakness. It stayed 'Neutral' on the sector. 

Among the tier 1 companies, Choice has targets of Rs 3,350 on Tata Consultancy Services Ltd (TCS), Rs 1,500 on Infosys Ltd, Rs 215 on Wipro Ltd, Rs 1,500 on HCL Technologies Ltd, Rs 1,700 on Tech Mahindra Ltd (TechM) and Rs 4,700 on LTM. Choice sees these companies reporting 7.5-9.2 per cent growth in revenue annually over FY26-29. 

Among tier II players, it has targets of Rs 6,200 on Persistent Systems, Rs 1,900 on Coforge Ltd, Rs 2,626 on Mphasis, Rs 650 on Zensar Tech and Rs 560 on Happiest Minds Technologies. Choice sees these companies logging 8-21 per cent sales growth for FY26-29.