Industry Newsgenerative aimanaged servicestcsvaluation
Jefferies Downgrades Indian IT Stocks Cites AI
9.3
Jefferies downgraded Infosys, HCLTech and Mphasis to "hold" and LTI MindTree, TCS and Hexaware to "underperform" this month, while naming Coforge, Sagility and IKS as top picks and trimming earnings estimates by 1–4%. It projects 6% earnings CAGR for FY26–28, believes markets price revenue CAGRs of 6–14% (large) and 9–17% (mid-sized) for FY26–36, and warns of AI-driven deflation in application-managed services.
Key Points
- 1Downgrades for Infosys, HCLTech, Mphasis, LTI MindTree, TCS, Hexaware amid AI-driven concerns
- 2Forecasts 6% earnings CAGR FY26–28 and anticipates AI-driven deflation in application-managed services
- 3Implies PE rerating risk; best-case 14–22x and worst-case 30–65% derating for sector valuations
Scoring Rationale
Credible Jefferies analysis with broad industry relevance, limited novelty beyond updated forecasts and valuation scenarios.
Sources
Public references used for this report.
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