Infosys tops broker picks as IT targets reset for 2026

What is changing in Indian IT right now

Indian IT stocks are entering a period where brokerages are arguing less about near-term demand and more about valuations, deal momentum, and how much growth is already priced in. Multiple reports cited a likely soft patch around the March 2026 quarter, along with lower visibility for FY2027. Even within that cautious setup, analysts continue to highlight a small set of names where cash generation, payout profile, and relative valuation look more supportive.

The latest set of calls puts Infosys in the centre of large-cap preferences, while Coforge is repeatedly identified as a mid-cap favourite. In small caps, eClerx is flagged as a preferred idea by Nomura India. At the same time, target prices and fair value estimates have been cut by some brokerages, reflecting a more conservative earnings outlook.

Nomura India’s top picks: Infosys, Coforge, eClerx

Nomura India said it prefers Infosys and reiterated a ‘Buy’ call. It also highlighted Coforge as its preferred mid-cap and eClerx as its preferred small-cap idea.

Nomura’s stock calls and targets in large-cap IT were explicit: ‘Buy’ on Infosys with a target of ₹1,570, ‘Buy’ on TCS with a target of ₹3,450, and ‘Buy’ on Tech Mahindra with a target of ₹1,660. It rated HCL Technologies as ‘Reduce’ with a target of ₹1,300, and maintained a ‘Hold’ on Wipro with a target of ₹200.

Kotak Institutional Equities: cautious sector view, selective buys

Kotak Institutional Equities said the Indian IT sector is in a transition phase and flagged concerns about growth momentum. It expects slower revenue growth in the March 2026 quarter, and noted that visibility for FY2027 remains low.

Despite that, Kotak continues to favour select companies. Among Tier-1 names, it prefers Infosys, TCS, and Tech Mahindra, citing relatively attractive valuations and strong cash generation. Kotak also said the prevailing stock prices of Infosys, TCS and Tech Mahindra reflect low growth expectations.

In the mid-tier segment, Kotak remains positive on Coforge and Hexaware. It also listed Indegene among key picks.

Kotak’s valuation framing: earnings multiple, payout and FCF yields

Kotak said Infosys, TCS and Tech Mahindra trade at about 16 times anticipated FY2028 earnings. It added that these names are available at a 4-5% payout yield and a 5-6% free cash flow (FCF) yield.

This framing matters because it explains why the brokerage is comfortable owning select names even as it lowers fair value estimates. The argument is that if growth expectations are already muted in prices, the downside risk may be relatively contained compared with higher-multiple peers, provided cash generation stays intact.

Target cuts and EPS revisions: 15% to 28% fair value reductions

Kotak revised its earnings per share (EPS) estimates for seven companies: Infosys, TCS, Wipro, HCLTech, Tech Mahindra, Persistent Systems, and Coforge. It cut fair value estimates by roughly 15% to 28%.

As part of this reset, Kotak reduced TCS’s target price to ₹3,090 from ₹3,675 earlier. It lowered Infosys’s target price to ₹1,530 from ₹1,900.

Separately, Kotak adjusted Persistent Systems’ rating from ‘Sell’ to ‘Reduce’.

Company expectations mentioned: TCS and Infosys into March 2026

Kotak’s note included March 2026 quarter expectations for some Tier-1 names.

For TCS, Kotak expects constant currency growth of around 1.2% in the March 2026 quarter, with support from the Coastal Cloud acquisition.

For Infosys, the company is said to be estimating a 1% revenue decline in the March 2026 quarter, attributed to seasonal slowdown and fewer working days. Margin stability is expected, and currency gains may offset visa costs.

Deal pipeline signals: Infosys and Coforge ranges

Infosys’s large deal wins were indicated in a range of $1.5 billion to $1.75 billion.

For Coforge, deals were indicated in a range of $150 million to $100 million, and analysts described it as a top mid-cap IT stock. Kotak also said Coforge should lead revenue growth among mid-tier names, followed by Persistent Systems, Hexaware Technologies and Mphasis.

More broker views: Systematix, BNP Paribas, HSBC, and others

Systematix highlighted TCS as its preferred Tier-1 pick, pointing to a strong order book and a recovery in discretionary spending. It said Infosys showed stronger growth in Q1 FY26 in US dollar terms, with a 4.5% quarter-on-quarter increase versus TCS’s 0.6% degrowth.

Systematix’s calls included a ‘Buy’ on TCS with a target price of ₹3,864. It suggested ‘Hold’ on Infosys (₹1,644), Wipro (₹225), HCL Technologies (₹1,592) and Sonata Software (₹423). It assigned a ‘Sell’ to Tech Mahindra with a target of ₹1,112.

BNP Paribas added Infosys to its top large-cap picks alongside TCS, and also liked HCL Tech. HSBC continued to prefer Infosys among large-tier stocks and favoured turnaround plays like LTIMindtree and Tech Mahindra, while also listing Hexaware and Mphasis among preferred mid-cap IT names.

Infosys reported numbers cited: Q1 performance snapshot

A separate analyst summary cited Infosys Q1 results with profit and revenue figures and a total contract value number. It reported profit after tax (PAT) at ₹6,921 crore, revenue at ₹42,279 crore, and total contract value (TCV) at $1.8 billion. It also mentioned guidance raised to 1-3%.

The same context noted that Infosys was focusing on AI, cloud, and digital services. It also stated that in April 2026, Infosys had a market capitalisation of about ₹5,27,000 crore and a P/E ratio in the 18-19 range.

Key brokerage calls and targets at a glance

Market impact: why targets are moving despite “preferred picks”

The common thread across these reports is a more conservative stance on near-term growth, particularly around the March 2026 quarter and the uncertainty around FY2027 demand visibility. That caution is showing up through EPS estimate revisions and fair value cuts, as Kotak’s 15% to 28% reduction range highlights.

At the same time, “preferred picks” lists are being shaped by valuation and cash returns rather than aggressive growth assumptions. Kotak’s reference to 16x anticipated FY2028 earnings and the 4-5% payout yield with 5-6% FCF yield explains why large caps like Infosys, TCS, and Tech Mahindra remain in focus, even when targets are trimmed.

Analysis: what investors can take away from these calls

Across brokerages, Infosys appears repeatedly as a large-cap preference, supported by valuation comfort and deal-related metrics such as TCV and large deal wins. Coforge stands out as a consensus mid-cap idea, with multiple reports pointing to stronger relative growth and a supportive deal pipeline.

However, the presence of target cuts and reduced fair values is a reminder that a “Buy” rating does not imply an unchanged earnings environment. Investors tracking the sector may need to separate near-term revenue expectations for the March 2026 quarter from longer-cycle factors such as multi-year deal ramps, pricing discipline, and the ability to sustain margins.

Conclusion

Brokerages are broadly cautious on the IT sector’s near-term growth outlook, but remain constructive on select stocks where valuations and cash generation are seen as supportive. Infosys continues to feature as a preferred large-cap name, while Coforge and eClerx are highlighted in mid and small caps respectively. The next major inputs for these calls will come from company commentary on demand, FY2027 visibility, and deal conversion trends, alongside any further changes to broker EPS assumptions.