Choice Institutional Equities turns more optimistic on select Indian IT mid-cap stocks like Coforge, Persistent Systems, and Tech Mahindra, citing shifting corporate technology budgets towards AI, cyber security, and cloud services amid sectoral consolidation.
Choice Institutional Equities has turned more positive on a narrow group of Indian information technology names, saying Coforge, Persistent Systems and Tech Mahindra are best placed to benefit as corporate technology budgets shift towards artificial intelligence, cyber security, cloud, data and modernisation. The brokerage said banks remain one of the brighter pockets for demand, even as it sees vendor consolidation and gains in wallet share becoming more important than broad-based spending growth.
According to Choice, technology budgets at banks have risen by about 16% since June 2024 and were up 7.8% year on year in June 2026, despite macroeconomic uncertainty. It argued that the firms most likely to win business are those that combine scale, banking and financial services expertise, modernisation skills and more differentiated AI offerings.
That view sits alongside a wave of increasingly selective calls from other brokerages. UBS recently upgraded Coforge, Mphasis and Tech Mahindra while turning more cautious on HCLTech and Persistent, saying AI revenues are still a small part of the sector and it remains too early to know whether new opportunities can fully offset pressure in legacy services. Nuvama, meanwhile, has said recent share-price weakness has made valuations in IT more attractive, while CLSA has stayed constructive on both Coforge and Persistent.
Choice gave Coforge a buy rating with a target price of Rs 2,050 and Persistent a buy rating with a target of Rs 6,350. Tech Mahindra received an add rating and a target of Rs 1,775. At the other end of the spectrum, the brokerage assigned reduce ratings to TCS, Infosys, Wipro and HCL Technologies, and a sell rating to LTIMindtree, reflecting its preference for mid-cap firms that it believes are better geared to the current spending cycle.
Disclaimer: This article is intended to inform and educate, not to recommend or endorse any financial product, investment or strategy. Please consider your own financial circumstances and seek professional advice where appropriate before making financial decisions.
