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JPMorgan cuts targets for IT stocks, says FY27 guidance critical amid AI concernsFor FY27, JPMorgan expects Infosys to report revenue growth of 2% to 5%, while HCL Technologies is seen growing at 3% to 6%. Wipro, however, is expected to report sequential growth of -2% to 0%.By Meghna Sen  March 24, 2026, 11:59:34 AM IST (Published)3 Min ReadThe first set of previews for India's information technology (IT) sector for the fourth quarter of financial year 2026 (Q4FY26) is out.

Global brokerage firm JPMorgan said that, for the first time in nearly eight years — since the cloud and digital deflation phase between 2015 and 2018 — revenue guidance will be the most critical factor, amid widespread pessimism in the sector.

JPMorgan believes that guidance for FY27 will be a key trigger in easing investor concerns around artificial intelligence-led pricing pressure, or "AI compression".

Any indication of growth acceleration could help restore confidence.

For FY27, JPMorgan expects Infosys to report revenue growth of 2% to 5%, while HCL Technologies is seen growing at 3% to 6%. Wipro, however, is expected to report sequential growth of -2% to 0%.

For Q4FY26, the brokerage expects a relatively healthy quarter, although performance may fall short of earlier expectations for some companies.

JPMorgan said that it has observed only selective headwinds so far, with geopolitical uncertainties and artificial intelligence-related disruptions impacting deal ramp-ups and closures.

In constant currency (CC) terms on a quarter-on-quarter (QoQ) basis, Tata Consultancy Services (TCS) is expected to report growth of 0.6%, while Infosys may see a decline of 0.7%.

HCL Technologies and Wipro are likely to report declines of 1.6% and 1.3%, respectively. The sector's last twelve months (LTM) growth is estimated at 1.5%.

Among mid-cap IT companies, Tata Technologies is expected to post the strongest growth at 4.4% quarter-on-quarter in constant currency terms, followed by Persistent Systems at 4% and Mphasis at 2%.

Tata Elxsi and Cyient are expected to grow by 1.5% and 1%, respectively, while Hexaware may see a marginal decline of 0.5%.

JPMorgan has also cut its revenue estimates across the sector, citing limited visibility on a recovery or "reflation" in demand.

The brokerage has lowered its medium-term growth assumptions, now expecting large-cap IT companies to grow at around 3%, compared to 4% earlier, and mid-cap firms at 5%, down from 6%.

This revision has also led to a 25% cut in target price-to-earnings (PE) multiples.

CompanyRatingNew TP(₹)Old TP(₹)TCSOW31504200InfosysOW15502050Infosys ADROW16.822.8HCLTechN14101690Wipro Ltd.N200270Wipro ADRN2.23L&T Technology (LTM)OW51007000MphasisOW26003300HexawareN470640Persistent SystemsOW60008000LTTSN35004650CyientOW12001500KPIT TechOW8501350

JPMorgan does not expect large IT services firms to return to their long-term average growth rates of 7-8% in the medium term.

However, the sharp depreciation of the Indian rupee against the US dollar is likely to provide some cushion to earnings downgrades.Continue ReadingNote To ReadersDisclaimer: The views and investment tips expressed by investment experts on CNBCTV18.com are their own and not that of the website or its management. CNBCTV18.com advises users to check with certified experts before taking any investment decisions.TagsIndian IT stocksInfosysIT SectorTata Consultancy Services TCSWipro