TCS, Infosys, HCL Tech shares: Brokerage target hints at 30% upside on Tata Group IT stock; targets for others

The broader domestic benchmark indices, the BSE Sensex and NSE Nifty, faced heavy selling pressure in Friday’s trade amid uncertainty surrounding the US-Iran conflict, which rattled investor sentiment. 

Despite the broader market gloom, IT heavyweights such as Infosys Ltd, Tata Consultancy Services Ltd (TCS), and HCL Technologies Ltd gained some ground in early trade. TCS, HCL Tech, and Infosys were among the only gainers, representing three of the only four stocks in the 30-pack index trading in the green and rising up to 1.5% at last check. 

Consequently, the BSE IT index stood out as the only major sectoral index trading higher, up 0.34% at 28,724.28. The IT sector has weathered a massive storm due to fears over generative AI disrupting the traditional tech services model, along with broader macro uncertainties. 

However, in a latest sector note, domestic brokerage ICICI Direct believes the worst might be priced in, noting that “staggered investments (over the next couple of months) in the selected IT stocks will yield strong returns over the next 18-24 months.” 

Leading the pack is TCS, with the stock currently trading around Rs 2,409.85, ICICI Direct has a ‘Buy’ rating and a target price of Rs 3,140 on the IT giant, an upside of over 30% from current levels. Alongside Tata Group IT firm, TCS, the brokerage has named LTIMindtree Ltd and Persistent Systems Ltd as its top picks, with a ‘Buy’ call on both and target price of Rs 5,200 and Rs 5,750

For Infosys and HCL Tech, ICICI Direct has maintained a ‘Hold’ rating, assigning target prices of Rs 1,400 and Rs 1,500, respectively. ICICI Direct has a ‘Buy’ rating on Tech Mahindra Ltd with a target price of Rs 1,650.

However, JM Financial takes a positive stance on Infosys, maintaining a ‘Buy’ rating. JM Financial highlighted the company’s strategic acquisitions of US-based Optimum Healthcare IT and Stratus Global.

ICICI Direct expects a “2-3% annual deflation in traditional services revenues for the next couple of years” as automation shrinks effort-based pricing models. 

Moreover, ICICI Direct points out that AI-led services could create a massive incremental total addressable market of $300-400 billion by 2030. Top They noted that Persistent Systems is already showing early monetisation traction in AI-led programs. 

JM Financial on Persistent Systems maintained an ‘Add’ rating. JM Financial said that the “overall demand environment remains stable” and the company is steadily on track to hit its $2 billion revenue aspiration by FY27.