Kotak Institutional Equities has downgraded shares of Infosys, Tata Consultancy Services (TCS) and LTIMindtree (LTM) yet again, reflecting the brokerage's continued cautious stance on the stocks in the current phase of enterprise AI adoption. A downgrade is a cut in a brokerage's recommendation on a stock — for example, a move from 'buy' toward 'hold' or 'reduce' — and typically signals that the analyst expects the shares to deliver weaker returns than peers or the broader market over the forecast period.

For Infosys, Kotak Institutional Equities noted that the company is at a slight disadvantage in this phase of enterprise AI adoption because of a marginally higher exposure towards application services. Application services — developing, maintaining and modernizing clients' business software — have long been a mainstay of Indian IT export revenue, and how generative AI reshapes the effort, pricing and billing attached to this work has become one of the sector's most closely watched questions since such tools began spreading widely across enterprises in late 2022. On this basis, the brokerage has warned that Infosys is set to underperform on organic growth compared with TCS, HCLTech and Cognizant in financial year 2027 (April 2026 to March 2027). Organic growth strips out the contribution of acquisitions, isolating underlying business momentum, and the quarterly results of FY2027 will therefore offer a direct, measurable test of Kotak's relative-growth call across the four named majors.

The action also carries weight beyond the three downgraded stocks. India's IT services industry is one of the country's largest export earners, and brokerage views on how enterprise AI adoption affects growth, pricing and deal economics have become a recurring focus of sector research; Kotak's latest ratings move sits squarely within that debate.

Company Background

• Infosys is one of India's largest IT services exporters, headquartered in Bengaluru.
• TCS, part of the Tata group, is India's biggest software services company by revenue. Both Infosys and TCS are heavyweight constituents of the Nifty IT index.
• LTIMindtree was created through the merger of Larsen & Toubro group IT firms L&T Infotech (LTI) and Mindtree.
• HCLTech and Cognizant are global IT services companies that compete with the Indian majors for large enterprise outsourcing contracts.
• Kotak Institutional Equities is the institutional research and broking arm of Kotak Mahindra Bank, one of India's largest private sector banks.

The downgrade was reported by CNBC-TV18 Markets on August 21, 2026.

Source: CNBC-TV18 | X: hormaz_fatakia