Indian IT Stocks Face AI Jitters: Is Market Panic Overblown?

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AI Fears Hit Indian IT Stocks: Is the Panic Overdone?

As many as six IT stocks, Infosys, HCLTech, Mphasis, LTIMindtree, TCS and Hexaware Technologies, have been downgraded by brokerage firm Jefferies on Monday, February 23, with their respective price targets being cut by up to 33%, along with a cut to their Earnings Per Share (EPS) estimates by 1% to 4%.

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CNBC TV18•23-02-2026, 16:58

AI Fears Hit Indian IT Stocks: Is the Panic Overdone?

•Indian IT sector faces a tough phase with Nifty IT index down 15% in 2026 due to AI disruption fears.
•Nomura India's Abhishek Bhandari states AI threat extends to entire IT services and BPO, causing pricing pressure and contract renegotiations.
•Clients demand higher discounts (20-30%) and shorter contract cycles due to AI-driven automation, potentially doubling annual deflation to 6-7%.
•AI could shift IT budgets from maintenance to innovation, as automation reduces costs and encourages transformation projects.
•Bhandari predicts a base case where IT companies adapt, growth returns to mid-to-high single digits, and multiples recover.

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