IT index falls 1.1%, HCLTech, Coforge lead the losses; Kotak slashes target prices of these seven IT stocks

IT index falls 1.1%, HCLTech, Coforge lead the losses; Kotak slashes target prices of these seven IT stocks

• Nifty IT index fell 1.3% as HCLTech, Coforge, Mphasis led losses
• Stronger rupee hits IT stocks; Kotak lowers target prices for 7 firms
• AI disruption fears and rupee rally impact IT exports

Did our AI summary help?

IT index was the biggest sectoral loser on March 5 even as markets were trading in green with HCLTech, Coforge, Mphasis leading the losses.

At 12:05 pm on March 5, Nifty IT index was trading 1.3% lower at 29,909 while HCLTech, Coforge, Mphasis shares were trading 2% lower each amid stronger rupee.

Also, Kotak Institutional Equities issued a note about the sector that said "weak transmission of tech spend To services keeps industry growth moderate".

"Cost of equity raised by 50-100 bps to reflect higher disruption risk. However, long-term IT services relevance intact, terminal growth assumptions are unchanged," the brokerage added.

The Indian rupee rallied sharply on Thursday, lifted by aggressive RBI action and a steadier global backdrop.

The rupee was at 91.62 per dollar, up 0.6% from its close on Wednesday, when the currency dropped to its all-time low of 92.3025.

Stronger rupee is seen as a headwind for export-focused IT services firms. IT stocks fell 20% in February to clock in their worst month since 2008 due to concerns over artificial intelligence-related disruptions triggered by Anthropic's AI tools.

Meanwhile, Kotak has slashed target price of seven IT stocks.

Persistent Systems has been downgraded to 'Reduce' from 'Sell' and target price has been cut to Rs 4,615 per share from Rs 5,900 per share.

TCS: 'Buy' call, target price cut To Rs 3,090 per share from Rs 3,675 per share.

Infosys: 'Buy' Call, target price cut to Rs 1,530 per share from Rs 1,900 per share.

Wipro: 'Sell' Call, target price cut to Rs 190 per share from Rs 240 per share.

HCLTech: 'Reduce' Call, target price cut to Rs 1,425 per share from Rs 1,680 per share.

Tech Mahindra: 'Buy' Call, target price cut to Rs 1,615 per share from Rs 2,000 per share.

Coforge: 'Buy' Call, target price cut to Rs 1,620 per share from Rs 2,250 per share.