Choice Broking favours TCS, Tech Mahindra, Coforge, Mphasis as IT stock picks after Accenture results

In a recent note, the brokerage preferred Tata Consultancy Services (TCS) and Tech Mahindra among Tier-1 IT stocks, while recommending Coforge and Mphasis as top investment ideas among mid-cap stocks.

Choice Broking forecasted FY27 to remain another subdued growth year for Indian IT, citing AI-led productivity pass-throughs, pricing pressure and continued softness in discretionary spending as factors that could constrain reported growth.

TCS shares have gained 0.44% over the past five trading sessions but declined 9.90% in one month and 16% over the past six months. The stock has fallen 35.68% year-to-date and 30.53% over the past year, with a five-year decline of 47.25%. Despite the recent downturn, TCS has delivered a cumulative return of 1,625% since its listing.

Tech Mahindra shares gained 0.90% in Thursday's session but declined 3.69% over the past month. Over the last six months, the stock has gained 6.11%, while year-to-date it remains down 4.34%.

Coforge share price gained 2.35% over the past week but declined 7.11% over the last month. The stock is up 10.28% year-to-date, 14.07% over one year, 78.86% over three years and 72.93% over five years.

Mphasis shares gained 0.73% over the past week but declined 9.27% in the past month, with a year-to-date performance of -20.45%. Over the longer term, Mphasis is down 16.38% over one year, 5.32% over three years and 25.64% over five years.

Accenture posted better-than-expected fourth-quarter results, reporting revenue of $18.7 billion, a 6% year-on-year increase in US dollar terms and 7% in local currency, surpassing the market consensus estimate of $18.04 billion.

For fiscal 2027, Accenture expects revenue growth of 3-6% in local currency. GAAP operating margin rose 370 basis points year-on-year to 15.3% in the quarter, while GAAP diluted earnings per share increased 46% to $3.29.

For the full fiscal year, Accenture's revenue stood at $74.2 billion, up 6% in US dollar terms. Full-year GAAP operating margin increased 70 basis points to 15.4%, adjusted EPS rose 8% to $13.97, and free cash flow came in at $11.6 billion.

The company returned a record $11.5 billion to shareholders in fiscal 2026, including $7.5 billion through share repurchases and redemptions.

The views and recommendations above are those of individual analysts or broking companies, not Mint. Investors are advised to check with certified experts before making any investment decisions.