Jefferies sees re-rating potential for select IT stocks; sub-index jumps 2%

By Reuters News06:56 (UTC), 21 October 2026 Updated

** Jefferies sees re-rating potential for select Indian IT stocks from any lack of disappointment in growth expectations and worsening sentiment on global AI capex

** Says stocks currently pricing in revenue growth 2-4 percentage points lower compared to growth delivered in last 10 fiscal years

** Nifty IT index .NIFTYIT up 2% on Wednesday, extending its gains for October to 16%

** IT majors Tata Consultancy Services TCS.NS and Wipro WIPR.NS beat September-quarter revenue expectations; HCLTech topped profit estimate

** Jefferies cites Infosys INFY.NS and TCS among large IT firms with further re-rating potential as valuation upside capped beyond 17-18x PE

** Raises TCS' PT to 2,125 rupees from 1,800 rupees, and INFY's to 1,160 rupees from 1,020 rupees

** Sagility SAGL.NS offers re-rating potential among midcaps, brokerage says

** YTD, Nifty IT index down 15% while benchmark Nifty 50 index .NSEI down 12.7%