IT Stocks Face FY27 Earnings Downgrade Risk, Jefferies Highlights Top Picks

• Jefferies warns Indian IT stocks face earnings downgrade risk in FY27, potentially impacting price-to-earnings multiples.
• Infosys, HCLTech are largecap top picks; Coforge, Sagility, IKS, Mphasis are midcap top picks, citing 14-27% EPS CAGR potential (FY26-28).
• IKS Health upgraded to "buy" (target ₹2,010); Hexaware Tech downgraded to "hold" (target ₹820) due to weak outlook.
• Geopolitical events and rising hardware spend could dampen discretionary IT services spending in 2026; AI weighs on short-term growth.
• Jefferies forecasts 4.7% growth for FY27, lower than consensus 5.8%, calling current estimates optimistic; margins expected to be range-bound.

Why It Matters: Jefferies predicts FY27 earnings downgrade for Indian IT, advising caution despite some top picks.