The Indian information technology (IT) sector has weathered about 24% correction, driven by a sudden macroeconomic recalibration around generative artificial intelligence (AI) adoption. IDBI Capital’s latest Q4FY26 review noted that the near-term AI deflation risk has expanded to 6-7% of portfolios. 

Amid this backdrop, the brokerage has updated its ratings and target prices across 13 major IT counters.

“Large-caps with AI monetisation moats (TCS $2.3bn+ AI rev, HCL $620mn ARR) are re-rating. Mid-caps face longer recovery. Companies treating AI only as efficiency tool (vs demand driver) risk falling behind,” IDBI Capital said.

IT stocks target price & ratings

Tata Consultancy Services Ltd (TCS) secured a ‘Buy’ rating and a target price of Rs 3,137 based on expectations of a gradual, AI-led recovery. Tech Mahindra Ltd also has a ‘Buy’ rating with a target price of Rs 1,697. Rounding out the buy recommendations is Birlasoft Ltd with a target price of Rs 430. 

For the rest of the sector's heavyweights, IDBI Capital maintains a cautious, wait-and-watch approach based on current valuations. Infosys Ltd and HCL Technologies Ltd both carry ‘Hold’ ratings, with target prices set at Rs 1,355 and Rs 1,614, respectively. 

Wipro Ltd remained a ‘Hold’ with a target of Rs 221, while LTIMindtree Ltd (LTM) is also rated ‘Hold’ with a target of Rs 4,746. L&T Technology Services Ltd (LTTS) tagged with a ‘Hold’ rating and a target price of Rs 3,765.  

The brokerage rated Coforge Ltd with ‘Hold’ call, setting a target price of Rs 1,300. Zensar and Newgen are also rated ‘Hold’ with target prices of Rs 569 and Rs 565, respectively. 

Rounding the list, Sonata Software carries a ‘Hold’ call with a target of Rs 332, and Cyient with a ‘Hold’ rating and a target price of Rs 1,015.