In its latest sector research report, BNP Paribas has provided fresh target prices and ratings for several prominent Indian IT services companies, reflecting a nuanced outlook for the industry. The report, published in early June 2026, highlights a cautious environment for global IT services, marked by geopolitical uncertainties and evolving client spending patterns.
Sector Outlook and Key Trends
According to BNP Paribas, the global IT services sector experienced a steady 3% year-on-year constant currency revenue growth for the quarter ending March 2026. However, the median deal total contract value (TCV) growth decelerated significantly to approximately 3% year-on-year, a notable drop from the 8% growth observed in the previous quarter.
The brokerage's outlook index, which synthesizes management commentary from various IT firms, indicates a modest decline in revenue growth expectations. This sentiment is primarily driven by ongoing geopolitical uncertainty, a slight softening in the deal win outlook, and aggressive pricing pressures stemming from vendor consolidation. These factors have collectively tempered margin expectations across the industry.
A significant trend identified by BNP Paribas is the shift in enterprise spending. Businesses are moving away from discretionary experimentation towards more disciplined, outcome-focused investments. Companies are increasingly funding their artificial intelligence (AI) ventures through rigorous cost optimization and automation strategies rather than new budget allocations.
Regarding specific verticals, IT firms maintain confidence in the Banking, Financial Services, and Insurance (BFSI) and Communications, Media, and Technology (CMT) sectors. Conversely, the outlook for Manufacturing, Consumer Packaged Goods (CPG) & Retail, Energy & Utilities (E&U), and Healthcare verticals deteriorated quarter-on-quarter.
Updated Target Prices and Ratings
BNP Paribas has issued the following target prices and ratings for key Indian IT stocks:
- Tata Consultancy Services Ltd (TCS): Assigned a (+) rating with a target price of Rs 3,250 per share.
- Infosys Ltd: Also received a (+) rating, with its target price set at Rs 1,670.
- Tech Mahindra Ltd: Holds a (+) rating and a target price of Rs 1,840.
- Persistent Systems Ltd: Assigned a (+) rating with a target price of Rs 6,300.
- LTM Ltd: Received an (=) rating with a target price of Rs 4,830.
- Mphasis Ltd: Also holds an (=) rating, with the brokerage pegging its target price at Rs 2,430.
- HCL Technologies Ltd: Handed a (-) rating by BNP Paribas, carrying a target price of Rs 1,345 per share.
- Wipro Ltd: Also has a (-) rating with a target price of Rs 205 per share.
These revised targets offer investors a fresh perspective on the potential performance of these IT giants amidst the evolving global economic and technological landscape.