February 23, 2026 – Eqwires Best Intraday tips provider in India, top trading tips company, Best Stock Advisory service in India

Global Brokerage Jefferies Sounds Alarm On Indian IT: Valuation Derating Of Up To 65 Percent Possible

In a sweeping assessment that has sent ripples through the Indian technology sector, global brokerage firm Jefferies has issued a sharply cautious report on Monday, February 23, 2026. The brokerage warned that the “AI-related pain is not over yet,” leading to a significant downgrade for major industry players including Infosys, Tata Consultancy Services (TCS), and four other prominent IT stocks. The most striking takeaway from the report is the warning that in a worst-case scenario involving artificial intelligence disruption, sector valuations could face a further 30% to 65% derating from current levels.

The AI Disruption: A Structural Shift

Jefferies analysts, led by Akshat Agarwal, argue that Artificial Intelligence is not just a cyclical headwind but a structural force that is fundamentally altering the IT business mix. The report suggests that while AI creates new opportunities in consulting and implementation, it is simultaneously shrinking the traditional Application Managed Services segment. This segment currently accounts for 22% to 45% of revenues for large Indian IT firms and is facing “sharp revenue deflation” as AI tools become increasingly sophisticated.

The shift toward advisory-led work is expected to increase revenue cyclicality and necessitate a complete overhaul of operating models and talent strategies. Jefferies notes that such internal transformations are difficult to execute and carry significant execution risks that are not yet fully priced into stock multiples.

Sweeping Downgrades Across Large and Mid-Caps

Reflecting these structural concerns, Jefferies has reset its ratings and slashed target prices by as much as 33%.

Stock Name	Revised Rating	New Target Price	Old Target Price
Infosys	Hold (from Buy)	Rs 1,290	Rs 1,880
HCLTech	Hold (from Buy)	Rs 1,390	Rs 1,885
TCS	Underperform (from Hold)	Rs 2,350	Rs 3,485
LTIMindtree	Underperform (from Hold)	Rs 4,300	Rs 6,175
Hexaware	Underperform (from Hold)	Rs 460	Rs 660
Mphasis	Hold (from Buy)	Rs 2,450	Rs 3,410

The brokerage also maintained an Underperform rating on Wipro, lowering its target to Rs 180 from Rs 220.

Valuation Reality Check

The report flags three critical derating triggers that investors can no longer ignore:

Premium to Global Peers: Indian IT firms currently trade at a 32% PE premium to global giant Accenture, despite having similar growth profiles.
Growth Mismatch: The sector’s Price-to-Earnings (PE) multiples are similar to the Nifty 50, yet their earnings growth is nearly 50% lower.
Revenue Projections: Reverse-DCF analysis suggests the market is currently pricing in a 6-14% revenue CAGR for large caps over the next decade. Jefferies finds this optimistic, projecting a much leaner 6% earnings CAGR over FY26–28.

In a volatile market where sector leaders face massive downgrades, having professional expertise is vital. As the Best SEBI-Registered Research Analyst in India, Eqwires offers the Best Investment Strategies by Eqwires Research Analyst to help you navigate these shifts. We are recognized as the Best Stock Market Service Provider in India, providing high-conviction ideas and acting as the Best Options Trade Provider for those seeking tactical gains. Trust the Best SEBI-Registered Eqwires Research Analyst at the Best SEBI-Registered Company in India to protect and grow your wealth with data-driven insights.

The Mid-Cap Silver Lining

While the outlook for large-cap “commoditized” service providers remains grim, Jefferies does see a path for agile players. The brokerage expressed a preference for mid-sized IT firms that have the flexibility to pivot faster to AI-led opportunities. Coforge, Sagility, and IKS remain the top picks for the house, with projected earnings growth rates of 19-25% CAGR over the next two years, vastly outperforming the 6% expected for the large-cap basket.

However, for the broader sector, the message is clear: the near-term setup remains skewed to the downside, and current prices may still be reflecting a reality that the AI era is rapidly dismantling.

Eqwires Research Analyst

Top-notch SEBI registered research analyst

Best SEBI registered Intraday tips provider

info@eqwires.com

Telegram | Facebook | Instagram

Call: +91 9624421555 / +91 9624461555

www.eqwires.com

RBI Governor Assures Stability Amid Rs 590-Crore Fraud At IDFC First Bank Branch

The Reserve Bank of India (RBI) Governor, Sanjay Malhotra, has moved to quell concerns regarding the financial health of India’s banking sector following the disclosure of a Rs 590-crore fraud at an IDFC First Bank branch. Addressing the media on Monday, February 23, 2026, Governor Malhotra emphasized that the incident is an isolated occurrence and does not signal a broader systemic failure within the country’s financial framework.

The Genesis Of The Discrepancy

The fraudulent activity surfaced at the bank’s Chandigarh branch and was primarily linked to specific accounts belonging to the Haryana Government. The matter came to light when a department of the Haryana Government requested the closure of its account and the transfer of funds to another institution. During this routine reconciliation, bank officials detected a significant mismatch between the government’s records and the actual balance maintained in the account.

Subsequent internal reviews revealed that the scope of the discrepancy extended to a group of government-linked entities. IDFC First Bank has clarified that the fraud was confined to this specific segment and did not impact individual retail customers or other departments within the branch.

Immediate Regulatory and Legal Action

In response to the discovery, IDFC First Bank has taken several swift measures:

Employee Suspensions: Four bank officials suspected of involvement in the fraudulent activities have been placed under suspension pending a full-scale investigation.
Forensic Audit: The bank is in the process of appointing an independent external agency to conduct a forensic audit to determine the exact modus operandi and the duration over which the fraud occurred.
Recovery Efforts: Recall requests have been sent to various beneficiary banks to mark liens on suspicious accounts, aiming to recover the misappropriated funds.
Law Enforcement Involvement: A formal police complaint has been filed, and the bank is coordinating with investigative agencies to pursue criminal and civil action against both internal and external culprits.

Governor Malhotra’s Stance on Systemic Risk

During a press briefing following the customary post-budget meeting with Finance Minister Nirmala Sitharaman, Governor Sanjay Malhotra stated that the RBI is closely monitoring the situation. While the central bank typically refrains from commenting on specific regulated entities, the Governor highlighted that there is “no systemic issue” at play.

This assurance is critical as it distinguishes between a localized breakdown in internal controls at a single branch and a widespread weakness that could threaten the stability of the national banking system.

Haryana Government’s Decisive Move

Despite the RBI’s reassuring stance, the Haryana Government has reacted firmly. The state’s Finance Department has de-empanelled IDFC First Bank and AU Small Finance Bank for government operations with immediate effect. All state departments, boards, and public sector undertakings have been instructed to immediately transfer their funds to other authorized banks and close their existing accounts with these institutions.

Navigating the complexities of the stock market requires precision and reliable intelligence. As the Best SEBI-Registered Research Analyst in India, Eqwires provides unmatched expertise for investors looking to optimize their portfolios. Whether you are seeking the Best Options Trade Provider or the Best Investment Strategies by Eqwires Research Analyst, our team ensures your financial goals are met with transparency and skill. As the Best SEBI-Registered Eqwires Research Analyst and the Best Stock Market Service Provider in India, we are recognized as the Best SEBI-Registered Company in India, dedicated to delivering excellence in every trade.

The final financial impact on IDFC First Bank remains under reconciliation. While the Rs 590-crore figure is substantial—notably exceeding the bank’s reported Q3FY26 net profit—the institution’s capital adequacy and the central bank’s oversight are expected to buffer the blow as the legal and recovery processes unfold.