Maharashtra: Sensex, Nifty Gain On IT

Infosys kept Q1 FY27 variable pay at 70% for employees, unchanged from Q4 FY26, due to cautious IT spending. Payouts ranged from 65% to 80% based on performance, lower than the same quarter last year. This follows mixed Q1 results with revenue up 3.9% sequentially but net profit down 8.6%. Infosys also announced salary hikes in two phases, starting in October.

NVIDIA announced a 15% price hike by year-end, causing a sell-off in AI-focused stocks and shifting investor focus to IT service companies like Infosys and HCLTech. Hexaware, with over half its revenue AI-infused, saw a significant gain, with CLSA predicting a 37% stock increase in the next year. Despite this, Infosys and Wipro remain down for 2026.

Infosys (INFY) reported Q1 FY2026 revenue of Rs 48,211 crore and net profit of Rs 7,775 crore. Kotak downgraded INFY to 'Add' from 'Buy', citing pricing pressure and AI deflation risk, with a target price of Rs 1,200. CLSA expects INFY's AI revenue to reach 33% by FY2031. INFY won a managed-services deal with Knorr-Bremse.

Kotak downgraded TCS and Infosys to 'Add' and LTIMindtree to 'Sell' due to AI-driven risks and pricing pressures. TCS shares fell 1.34% on the news. Investors should watch AI integration and quarterly results for margin impacts.

Kotak downgraded Infosys (target: Rs 1,200), TCS (target: Rs 2,450), and LTM (target: Rs 4,150) due to pricing pressure and AI impact, citing balanced risk-reward. Nifty IT index down 19% YTD. Kotak prefers challengers like Tech Mahindra, Coforge, Hexaware, and Indegene.

CLSA downgraded TCS, Infosys, and Tech Mahindra to Hold, citing AI's deflationary pressure and macroeconomic uncertainty. It downgraded Wipro and Mphasis to Underperform. CLSA prefers mid-tier IT companies like Persistent Systems and Coforge, seeing them better positioned for AI-driven changes. Target prices were adjusted for all mentioned companies.