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IT Stocks: Kotak cuts price targets by up to 30% but bets on 'long-term relevance'The Nifty IT index has been resilient over the last two sessions amidst the market sell-off. The index was down only 0.5% on Friday, in comparison to the Nifty, which fell 1.5%. All Nifty IT constituents are down between 11% to as low as 30% so far on a year-to-date basis.By Hormaz Fatakia   March 5, 2026, 7:51:46 AM IST (Published)3 Min ReadBrokerage firm Kotak Institutional Equities has cut its Earnings Per Share (EPS) estimates for seven IT companies, Infosys, TCS, Wipro, HCLTech, Tech Mahindra, Persistent Systems and Coforge. It has also cut its price target on these stocks by 15% to 28% in its note on Thursday, March 5.

Despite these cuts, Kotak Institutional Equities said that IT services will remain relevant in the long-term and they are not changing their terminal growth assumptions. It prefers Infosys, TCS, and Tech Mahindra among largecap IT, and Coforge and Hexaware among Midcap IT stocks.

The brokerage said that it is baking in higher Gen AI-driven revenue deflation in financial year 2027-2028, noting the increasing risks, even as the current adoption rates aligns with their expectations.

Kotak also expects weak transmission of tech spending growth to services to continue, which will lead to modest industry growth over the next several years. It is also baking in a higher disruption risks in the future by increasing the cost of equity assumptions by 50-100 basis points.

Among its stock recommendations, it said that quality challengers could have a meaningful leg up over incumbents. Here's a look at their recommendations:

Infosys | "Buy" rating maintained but price target cut to ₹1,530 from ₹1,900 earlier. The revised price target implies an upside potential of 17% from current levels.

TCS | The brokerage has maintained its "buy" rating here as well but cut its price target to ₹3,090 from ₹3,675 earlier. This implies a 20% upside potential from these levels.

Wipro | The brokerage has maintained its "sell" rating on the stock and cut its price target to ₹190 from ₹240 earlier. The revised price target is nearly the same price at which the stock closed on Wednesday.

HCLTech | "Reduce" rating has been maintained on the stock with the price target being cut to ₹1,425 from ₹1,680 earlier. This implies an upside potential of only 4.5%.

Tech Mahindra | The brokerage has maintained its "buy" rating on the stock with a cut in its price target to ₹1,615 from ₹2,000 earlier. The revised price target also implies an upside potential of 20% from these levels.

Coforge | "Buy" rating has been maintained on the stock with price target being cut to ₹1,620 from ₹2,250 earlier. The upside potential here is the highest among the stocks under coverage in this story, at 39%.

Persistent Systems | The stock has been upgraded by Kotak to "reduce" from its earlier rating of "sell" with a downward revision in its price target to ₹4,615 from ₹5,900 earlier.

The Nifty IT index has been resilient over the last two sessions amidst the market sell-off. The index was down only 0.5% on Friday, in comparison to the Nifty, which fell 1.5%. All Nifty IT constituents are down between 11% to as low as 30% so far on a year-to-date basis.Continue ReadingTagsCoforgeHCL Tech sharesHexaware TechnologiesIndian IT stocksInfosys share priceIT stocksNifty ITPersistent Systemsshare market todayTCS share priceTech MahindraTech Mahindra Share Price