Jefferies downgrades, cuts target of IT stocks by up to 35%; highlights top picks

Global brokerage firm Jefferies, in it latest note on India’s Information Technology (IT) sector, warned that growing uncertainty and a potentially worsening business outlook, especially following the recent tariff announcement, could negatively impact IT demand through at least FY26.

The brokerage has cut earnings per share (EPS) estimates for Indian IT companies by 2–14%.

According to Jefferies, a re-rating of IT stocks is unlikely unless there is a meaningful improvement in the outlook for US GDP growth.
It favours stocks with higher growth visibility and lower risk of valuation de-rating, naming Infosys, Coforge, and Sagility as its top picks.

Jefferies has also reduced its price targets on several Indian IT companies, with cuts ranging between 5% and 35%, citing increasing uncertainty in the sector.

Jefferies has maintained a ‘Buy’ rating on Infosys, but revised its price target down to ₹1,700 per share from ₹1,835 earlier.
For Coforge, Jefferies has also kept a ‘Buy’ rating, but slashed the target price to ₹7,860 per share, down from ₹10,350.

In the case of Sagility, Jefferies continues to maintain a ‘Buy’ call, but reduced the price target to ₹48 per share from ₹64.

The brokerage has downgraded TCS to ‘Hold’ from its earlier ‘Buy’ rating, citing limited growth visibility. It has cut the price target to ₹3,300 per share from ₹4,530 earlier.

Jefferies has also downgraded Wipro to ‘Underperform’ from ‘Hold’, citing its high exposure to discretionary spending. The price target has been cut to ₹210 per share from ₹310.

For HCL Technologies, Jefferies has maintained a ‘Hold’ rating, but reduced the price target to ₹1,520 per share from ₹1,900.

The brokerage has also downgraded LTIMindtree and Mphasis, highlighting their high exposure to the US market and discretionary IT services.

Mphasis has been downgraded to ‘Hold’ from an earlier rating of ‘Buy’, with the price target cut to ₹2,300 per share from ₹3,250.